UK payments regulation is consolidating into a single supervisor, and the FCA is already acting on the mandate it hasn’t formally received yet.
What happened HM Treasury confirmed on 21 April that it will abolish the Payment Systems Regulator and transfer its functions to the FCA. The Financial Services and Markets Bill 2026–27, which provides the legal mechanism, had its first Lords reading on 19 May. Separately, the FCA opened a Competition Act 1998 investigation into Mastercard, Visa and PayPal on 6 May — a payments-competition exercise the PSR would historically have led.
Why it’s the signal The Bill hasn’t passed. The PSR hasn’t dissolved. But the FCA is behaving like the payments regulator already — running a competition-law investigation on card-scheme and PSP conduct months before the transfer completes. That’s not procedural tidying; it’s the FCA testing powers and posture ahead of the legal handover. The gap between “confirmed direction” and “completed transfer” is where firms are least protected: two regulators with overlapping but not identical mandates, both active.
What it tells us This isn’t a rebrand. It’s a specialist competition regulator — a decade of payments-specific enforcement experience — being absorbed into a broader conduct regulator with a different institutional posture. The FCA that emerges post-commencement will supervise payments differently than the FCA does today, and the transition period itself carries risk: firms answering to a moving target, not a fixed one.
Watch list The Financial Services and Markets Bill’s passage through the Lords and Commons; the FCA’s Mastercard/Visa/PayPal investigation outcome; any Treasury sequencing update on when PSR functions formally transfer (informal guidance points toward end-2026).
Sign-off This afternoon’s SIG-R takes the regulatory read and asks the harder question — what a firm should actually do while two regulators are both live.
