PSR to Press Ahead on Card Fees, Fraud and Payments Reform in 2026/27

WHY THIS MATTERS: The UK’s 2026/27 payments blueprint is far more than an operational update; it codifies a profound shift toward regulatory scrutiny that will directly impact every revenue model and risk profile in the country. The simultaneous attack on cross-border interchange fees and domestic scheme costs signals a clear intent to lower the cost of acceptance for merchants, potentially re-routing significant fee income away from international card networks and acquirers. Critically, the plan accelerates the liability burden on banks for Authorised Push Payment (APP) fraud, formalizing the expectation that firms, not consumers, must bear the financial consequences of sophisticated scams. Furthermore, by committing to a long-term regulatory structure for Open Banking 2.0, the PSR is ensuring that the foundation for UK payments modernization—covering fraud, infrastructure, and competition—will remain the industry’s single biggest compliance and innovation driver this year.

The Payment Systems Regulator has today set out its work programme for 2026/27 highlighting its focus on tackling high card fees, maintaining world-leading protections against Authorised Push Payment (APP) fraud and supporting innovation and competition across UK payments. This year’s work plan sets out how the regulator will build on recent reforms, take forward further action where markets aren’t working well for people and businesses and support the delivery of the National Payments Vision alongside the Bank of England, FCA and HM Treasury.

The annual plan sets out the organisation’s key aims, activities and costs for 2026/27.  

In the year ahead, the PSR will focus on:

• Taking action on card fees, including next steps on cross border interchange fees and implementing remedies on domestic scheme and processing fees to address weak competition.
• Continuing action to tackle APP fraud, including publishing and responding to the independent evaluation of the first year of mandatory reimbursement and monitoring how firms are meeting the standards expected of them.
• Overseeing the delivery of critical payments infrastructure, working closely with the Bank of England, HM Treasury and the Financial Conduct Authority (FCA) through the Payments Vision Delivery Committee.
• Supporting the next phases of open banking, including work to establish a long term regulatory framework and future oversight arrangements.
• Strengthening supervision and enforcement, aligning approaches with the FCA to support effective oversight.
• Delivering consolidation planning that manages impact and provides clarity and certainty for regulated entities, enabling them to continue operating with confidence.

David Geale, Managing Director of the Payment Systems Regulator, said: “In the year ahead, we will focus on tackling APP fraud, taking action on card fees, driving the next phase of open banking and overseeing critical payments infrastructure. In a time of change as the PSR is consolidated into the FCA, our role is to provide continuity, clarity and confidence, and we’ve set out how we will protect those reliant on payments services while supporting competition and innovation.”

Ashley Alder, Chair of the PSR, said: “This year’s focus demonstrates the PSR’s continued commitment to promoting competition and innovation, while providing certainty for firms, consumers and businesses as we prepare for future regulatory changes.”

FF NEWS TAKE: This work program moves the needle decisively, forcing a reckoning between financial institutions and their payments infrastructure. The mandatory reimbursement regime for APP fraud transforms financial crime prevention from a loss mitigation task into a core profitability concern for issuing banks. The industry’s near-term focus must now shift from merely tracking the new rules to anticipating the long-term impact of the PSR’s consolidation into the FCA. We are watching whether this regulatory merger accelerates or slows the ambition for true payments modernization over the next 18 months.