The NPV established the PVDC, chaired by the Bank of England, to enhance regulatory coordination and drive implementation of key activities – including setting out the approach for the development and delivery of the UK’s retail payments infrastructure needs. The Committee is supported by a Vision Engagement Group comprising over 30 representatives from the sector.

The PVDC Update in July set out a collaborative new model to design and deliver next-generation infrastructure. The model creates a new governance structure made up of: 

1. a Retail Payments Infrastructure Board (RPIB), chaired by the Bank of England. Membership of RPIB will automatically include the Chair / CEO of the Delivery Company, senior representation from Pay.UK and an observer from FCA / PSR. RPIB will operate as an advisory board that will translate the vision and strategy set by the PVDC into a design and blueprint for delivery: and

2. a delivery company, a new industry-owned and led delivery company, who will be responsible for procuring and funding the delivery of the next-generation infrastructure.

This model emphasises public-private sector collaboration, leveraging expertise to drive innovation, competition, and security. There is still, however, much to learn and a few questions on how this new “collaborative” approach will work in practice. For example:

• The funding model for the delivery company is still being considered. Eyes are currently on other examples in the market, including the commercial models designed for the operator of the Commercial Variable Recurring Payments entity. 
• The interplay between RPIB and Delivery company is still not clear. For example, the governance model envisages the RPIB overseeing the activities of the delivery committee. As a result, how much control and autonomy will the delivery company have in making decisions on procurement or delivery? What is the interplay between the different boards and given the boards will be made up of industry representatives, how will conflicts be managed? All will become clear in due course, we are sure.  

Next Steps

As a starter, we hear the PVDC to launch the strategy and vision mid-October, so watch this space. 

Finally, a note on Pay.UK; it will continue to play an integral role in maintaining the quality of the existing payments infrastructure in the UK. It will focus on the running of the existing interbank systems. Pay.UK will also contribute its expertise through representation on the Board and the Delivery Company.

The NPV named the FCA as the lead regulator to oversee the progress of open banking in the UK. This follows publications by the now disbanded Joint Regulatory Oversight Committee for open banking (JROC), which called for the establishment of a new entity to be the successor of Open Banking Limited (OBL). This successor is commonly known as the ‘Future Entity’ and would be tasked with setting the standards for the next phase of open banking.

In August 2025, with its new mandate in mind, the FCA published a feedback statement (FS25/4) outlining its vision for the Future Entity, its expectations for the role of the Future Entity, how it will sit within the open banking ecosystem, and the next steps for establishing the Future Entity.

Governance and funding

The Future Entity will operate as a not-for-profit company limited by guarantee, funded by participants, and will be subject to FCA oversight under the Data (Use and Access) Act. An independent Board with ecosystem-wide representation, will oversee the Future Entity, supported by advisory groups. It is not expected to be a public body or have enforcement authority. 

Functions

Its responsibilities will include:

• Setting common standards that will provide a minimum level of service and interoperability across open banking services.
• Monitoring Application Programming Interfaces (API) performance.
• Ensuring adherence to relevant standards (including providing information to the FCA).
• Providing directory and certification services.
• Working with multilateral agreement owner/operators to develop standards that enable commercial schemes.

Commercial schemes

Separately, there will be a competitive layer of open banking schemes, operating commercially. These commercial schemes will develop the rules that govern how firms interact and deal with problems.

The commercial schemes may or may not be for profit and the FCA expects them to be industry-led. It also expects them to use the common API standards developed and overseen by the Future Entity, to ensure interoperability. Commercial scheme operators may innovate beyond these standards to provide premium services. 

The FCA does not anticipate that the Future Entity will own or operate commercial schemes for open banking where there are incentives for market innovation. However, where there are not commercial incentives, or there are other market failures, the Future Entity may run those schemes. The FCA says that the Future Entity and operators in the commercial scheme layer are expected to be regulated as interface bodies under the Data Use and Access Act 2025.

The first one of these schemes is likely to be for commercial variable recurring payments, which Addleshaw Goddard has been working closely with OBL and industry participants to develop the scheme rules for. 

Next steps

Against this backdrop, and the possibility that the Future Entity may also expand into Open Finance, it is crucial that participants in the Open Banking ecosystem actively contribute to the design and implementation of the Future Entity. The FCA is keen to work with stakeholders to establish the Future Entity, with establishment targeted for the end of 2025. Although these proposals are subject to legislation, policy thinking in this area is still under development and firms should take every opportunity to engage with the FCA before the latter making any rules about the Future Entity or the wider ecosystem.

In March 2025, the Government announced its intention to abolish the PSR and consolidate its functions within the FCA. The Prime Minister outlined that regulations will be cut back in a bid to drive economic growth and reduce the burdens on business. It was announced that PSR will be mainly consolidated into the FCA, making it easier for firms to deal with one port of call. This decision arose following complaints from businesses that the regulatory environment was too complex, costing them time, money and resource. 

On 8 September 2025, HM Treasury published a consultation setting out details of how the Government will integrate the PSR’s functions within the FCA. These functions include promoting competition and innovation in payment systems and the services provided by payment systems, as well as supporting the interests of consumers and businesses who make payments every day. It is proposing to integrate these functions within the FCA’s current framework in the Financial Services and Markets Act 2000 (FSMA 2000) to the extent that this is practicable. Where not practicable, the Government expects that relevant functions would be set out in a new part of FSMA 2000.

What does this ‘integration’ actually mean? 

• The FCA will take over the PSR’s current role as economic regulator of payment systems designated by HMT and their participants (e.g. operators and Payment Service Providers).
• The FCA will take on the PSR responsibilities. In particular, the PSR currently has statutory objectives pursuant to Financial Services (Banking Reform) Act 2013 (FSBRA 2013) to promote competition and innovation in payment systems. This will now become an objective of the FCA alongside the FCA’s existing strategic objective and competitiveness and growth secondary objective for payment systems.
• The FCA’s enforcement tool kit will remain but appears that HMT is considering whether to enhance those to enable the FCA to issue specific directions and gain investigatory powers, which the PSR currently deploys.
• HMT will create a single framework for governing access to payment systems by removing the overlap in the Payment Services Regulations 2017 (PSRs) (Regulations 103 – 104). 
• The approach used in the current framework of designating payment systems will be retained (HMT designates these payment systems under FSBRA 2013). There will be no change in those payment systems currently designated. The scope of HMT’s designation powers remains the same.
• No new categories of authorised regulated activity will be created.

Next steps

The consultation will close on 20 October 2025. HM Treasury plans to bring forward legislation to implement its final policy when Parliamentary time allows. The PSR will continue to have access to its statutory powers until legislation is passed by Parliament to enact the changes. In the interim period, the PSR and FCA will work together to deliver a smooth transition of responsibilities.