HM Treasury is consulting on how the rules for payment services and electronic money should be updated. The consultation, Modernising Payment Services Regulation, was published on 14 July 2026 and closes at 11:59pm on 6 October 2026 (gov.uk).

What it covers

The consultation is mainly about the Payment Services Regulations 2017 and the Electronic Money Regulations 2011, and how they should change to cope with new kinds of payment (consultation document, para 2.2). Its main themes include:

  • More rule-making by the FCA. The government asks for views on the extent to which responsibility for setting requirements on payment firms should be delegated to the Financial Conduct Authority (consultation document, para 1.10 and chapter 2).
  • Open Banking and pay by bank. The document describes account-to-account, or "pay by bank", payments as letting consumers pay in shops and online directly from their bank account "as a competitive alternative to card payments" (para 1.6). The government intends to create a new legal right of access to support variable recurring payments, a form of Open Banking payment (para 4.11).
  • New technology. It asks how the rules should handle tokenised payments and payments made by AI agents on someone's behalf (consultation document, chapter 3).

What is not included: card fees

The consultation states that the interchange fee rules, the retained Interchange Fee Regulation 2015 and the Payment Card Interchange Fee Regulations 2015, are not in scope. The Treasury says this reflects "a significant amount of existing work to ensure that card fees are set fairly for both merchants and financial services firms", including the Payment Systems Regulator's market reviews of cross-border interchange fees and of scheme and processing fees (para 2.3).

What it means for a small business

There is no immediate change to how you take card payments or what you pay. The caps on UK consumer card interchange stay as they are, and the separate regulatory work on card fees continues.

The longer-term point is the government's support for pay by bank as an alternative to cards. If Open Banking payments become widely available in shops and online, businesses may in future have another way to get paid alongside their card machine. The document notes that, for this to happen, payment providers need to be able to reach a sufficient proportion of customers' bank accounts, and that the government will monitor adoption (paras 4.23 and 4.24).

Responses can be sent to HM Treasury until the closing date using the details on the consultation page.

In the meantime, card fees are still a cost worth checking. You can upload a statement for a free comparison.