Fintech & payments regulation in United Kingdom (2026)

Legal framework

Payment Services Regulations 2017 (SI 2017/752) and Electronic Money Regulations 2011 (SI 2011/99), administered by the Financial Conduct Authority (FCA); payment systems oversight by the Payment Systems Regulator (PSR), pending absorption into FCA

How to get an EMI license in United Kingdom

To provide electronic-money or payment services in United Kingdom you need authorisation as an Electronic Money Institution (EMI), supervised by the Financial Conduct Authority (FCA), under the Electronic Money Regulations 2011 and the Payment Services Regulations 2017.

Authority

the Financial Conduct Authority (FCA)

License required

authorisation as an Electronic Money Institution (EMI)

Framework / law

the Electronic Money Regulations 2011 and the Payment Services Regulations 2017

Minimum capital

£350,000 initial capital for an Authorised EMI; a Small EMI regime exists below an average £5m of outstanding e-money

Timeline

typically 6–12 months; the FCA has up to 3 months from a complete application

Cost

an FCA application fee (around £5,000 for an Authorised EMI) plus ongoing periodic fees

Passporting

No: since Brexit a UK EMI no longer passports into the EEA; a separate EU entity is needed for EEA coverage.

London remains a major e-money hub, but a UK EMI covers the UK only; firms serving the EU set up a parallel EEA EMI.

Key points: digital payments & fintech in United Kingdom

1. 01Payment & E-Money Licensing

   Firms must obtain FCA authorisation or registration as an Authorised Payment Institution (API), Small Payment Institution (SPI), Authorised E-Money Institution (AEMI), or Small E-Money Institution (SEMI) under PSR 2017 and EMRs 2011. The FCA maintains a public register and publishes detailed application guidance.

   fca.org.uk fca.org.uk fca.org.uk

2. 02New Safeguarding Rules (PS25/12, May 2026)

   FCA Policy Statement PS25/12 introduced a strengthened safeguarding regime for payment and e-money firms, effective 7 May 2026. Customer funds must be ring-fenced from firm assets; proportionate audit exemptions apply for firms holding under £100,000 in customer funds.

   fca.org.uk fca.org.uk

3. 03BNPL Regulation (PS26/1, July 2026)

   Unregulated Buy Now Pay Later (classified as Deferred Payment Credit) comes under FCA regulation from 15 July 2026 via PS26/1. Lenders must conduct affordability checks, provide clear pre-contract information, and support customers in financial difficulty. A temporary permissions window opened 15 May 2026 for existing firms to register ahead of full authorisation.

   fca.org.uk gov.uk assets.publishing.service.gov.uk

4. 04Open Banking & Variable Recurring Payments

   The Joint Regulatory Oversight Committee (JROC) governs the transition of Open Banking Limited to a permanent future entity. Variable Recurring Payments (VRP) launched in Q1 2026 via the UK Payments Initiative (UKPI), a consortium of 31 firms. HM Treasury is expected to introduce legislation in 2026 granting powers to set long-term open banking rules.

   fca.org.uk fca.org.uk openbanking.org.uk

5. 05Instant Payments Infrastructure (IIR / Faster Payments)

   The New Payments Architecture (NPA) programme was renamed the Interbank Infrastructure Renewal (IIR) following cancellation of the original procurement; the July 2026 migration deadline under Specific Direction 3 was missed. A National Payments Vision strategy published November 2025 sets a new, more flexible approach to next-generation retail infrastructure.

   psr.org.uk gov.uk bankofengland.co.uk

6. 06PSR Merger into FCA

   In September 2025 HM Government consulted on abolishing the Payment Systems Regulator and transferring its functions, including competition and innovation oversight of designated payment systems, to the FCA. The FCA and PSR are collaborating on operational readiness for the transfer.

   gov.uk fca.org.uk

EMI license in United Kingdom: FAQ

Timeline of decisions

1. 4 Feb 2026Law · official
   FSMA 2000 (Cryptoassets) Regulations 2026 made by Parliament

   SI 2026/102 creates the comprehensive FCA licensing regime for cryptoasset activities, including stablecoin issuance, operating trading platforms, dealing, and arranging, with full commencement on 25 October 2027 and firm applications opening September 2026. This is the foundational statute for the UK's end-state crypto regulatory framework.

   legislation.gov.uk

2. 14 Nov 2024Guidance · official
   HM Treasury publishes National Payments Vision

   Sets out the government's ambition for a 'trusted, world-leading payments ecosystem on next-generation technology,' establishing a cross-authority Payments Vision Delivery Committee chaired by HM Treasury and issuing formal recommendations to the FCA and PSR to streamline the fragmented regulatory landscape. Marks the first overarching political strategy for the UK payments sector post-Brexit.

   HM Treasury / GOV.UK

3. 1 Sept 2024Decision
   CMA confirms full completion of Open Banking Roadmap by all CMA9 banks

   The CMA declared all nine mandated banks (including Bank of Ireland and Danske) had implemented the full suite of open banking payment and account-information services required under the 2017 Order, closing the original mandate and transitioning oversight to the new Joint Regulatory Oversight Committee. Signals the end of the compulsory build phase and the start of a commercially-led open finance era.

   Open Banking Implementation Entity

4. 8 Oct 2023Law · official
   FCA crypto financial promotions regime comes into force

   Under PS23/6, all firms marketing cryptoassets to UK consumers, including overseas firms, must comply with financial promotion rules classifying crypto as a 'Restricted Mass Market Investment': mandatory risk warnings, a 24-hour cooling-off for first-time investors, and a ban on refer-a-friend bonuses. The FCA immediately began enforcement, including legal proceedings against HTX for illegal promotions.

   FCA

5. 29 Jun 2023Law · official
   Financial Services and Markets Act 2023 receives Royal Assent

   Expands the regulatory remits of the Bank of England, FCA, and PSR to cover 'digital settlement assets' (including sterling stablecoins) used for payment, enabling HM Treasury to bring systemic stablecoin payment systems within the existing payments regulatory perimeter. Also repeals retained EU financial services law, giving UK regulators rule-making powers post-Brexit.

   legislation.gov.uk

6. 13 Jan 2018Law · official
   Payment Services Regulations 2017 come into force, implementing PSD2

   SI 2017/752 transposed the EU's revised Payment Services Directive into UK law, introducing authorisation requirements for Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs), mandating open API access to bank accounts, and requiring strong customer authentication. This created the legal backbone for third-party fintech access to consumer banking data.

   legislation.gov.uk

7. 1 Feb 2017Decision · official
   CMA Retail Banking Market Investigation Order 2017, Open Banking mandate issued

   The CMA ordered the nine largest current-account providers (CMA9) to establish and fund the Open Banking Implementation Entity (OBIE) and deliver standardised open APIs for account data and payments by specified deadlines. This was the world's first regulatory mandate for open banking and directly enabled the UK's fintech ecosystem to scale on bank-held data.

   CMA / GOV.UK

8. 1 May 2016Decision · official
   FCA launches world-first Regulatory Sandbox (Cohort 1)

   As part of Project Innovate, the FCA opened its regulatory sandbox to applications, accepting 24 of 69 firms in Cohort 1 and approving 18 testing plans by October 2016. The sandbox allows fintech firms to test novel products under restricted authorisation and bespoke waivers, removing a key licensing barrier to innovation and establishing a model replicated globally.

   FCA

9. 1 Apr 2015Decision · official
   Payment Systems Regulator (PSR) becomes fully operational

   Created under the Financial Services (Banking Reform) Act 2013, the PSR became the UK's first independent economic regulator dedicated solely to payment systems, with statutory objectives to promote competition, innovation, and the interests of service users. It gained concurrent competition powers with the CMA and direct access regulation over Bacs, CHAPS, Faster Payments, and card schemes.

   Payment Systems Regulator

10. 18 Dec 2013Law · official
    Financial Services (Banking Reform) Act 2013 enacted, creates Payment Systems Regulator

    The Act established the legal basis for the PSR, designated specific payment systems for regulatory oversight, and introduced access and pricing rules for interbank infrastructure in response to the Payments Council review. It restructured the institutional landscape governing UK payments infrastructure for the first time since the Banking Act 1979.

    legislation.gov.uk

11. 30 Apr 2011Law · official
    Electronic Money Regulations 2011, authorisation regime for e-money issuers

    Transposed the EU's Second E-Money Directive, replacing the 2009 e-money rules and introducing a two-tier system of 'authorised' and 'small' electronic money institutions with distinct capital and safeguarding requirements. This created the primary licensing pathway used by mobile wallets, prepaid card firms, and digital payment fintechs operating in the UK.

    legislation.gov.uk

12. 1 Nov 2009Law · official
    Payment Services Regulations 2009, UK's first statutory licensing framework for payment firms

    Transposed EU Payment Services Directive 2007/64/EC, for the first time requiring firms providing payment services (money transfer, card acquiring, issuing) to be authorised or registered with the FSA (later FCA), with rules on transparency, liability, and consumer protection. Established the foundational perimeter that all subsequent UK payments regulation has built upon.

    legislation.gov.uk

13. Decision · official
    ePayments Systems Limited enters special administration

    UK FCA News

14. Decision · official
    Better outcomes begin when payment firms understand customers’ needs

    UK FCA News

15. Decision · official
    Payments Vision Delivery Committee update on future retail payments infrastructure

    UK FCA News

16. Decision · official
    Open banking takes next step forward with launch of UK Payments Initiative scheme

    UK FCA News

Sources

1. 1.fca.org.uk/firms/electronic-money-payment-institutions
2. 2.fca.org.uk/firms/apply-emoney-payment-institution
3. 3.fca.org.uk/firms/payment-services-regulations-e-money-regulations
4. 4.legislation.gov.uk/uksi/2017/752
5. 5.fca.org.uk/publications/policy-statements/ps25-12-changes-safeguarding-regime-pa
6. 6.fca.org.uk/news/press-releases/payment-safeguarding-rules-changes
7. 7.fca.org.uk/publications/policy-statements/ps26-1-regulation-deferred-payment-cre
8. 8.gov.uk/government/news/millions-of-shoppers-to-be-protected-by-new-buy-now-p
9. 9.assets.publishing.service.gov.uk/media/6827536302662c6f8ec243c4/250516_-_BNPL_consultation_response_.p
10. 10.fca.org.uk/news/news-stories/open-banking-2025-progress
11. 11.fca.org.uk/firms/future-open-banking-joint-regulatory-oversight-committee
12. 12.openbanking.org.uk/jroc/
13. 13.psr.org.uk/our-work/interbank-infrastructure-renewal-iir/
14. 14.gov.uk/government/publications/national-payments-vision/national-payments-vi
15. 15.bankofengland.co.uk/payment-and-settlement/the-national-payments-vision
16. 16.gov.uk/government/consultations/a-streamlined-approach-to-payment-systems-re
17. 17.fca.org.uk/firms/roles-responsibilities-payments-regulation