The UK’s Payments Overhaul: Laying the Foundations for 2030
On 26 February 2026, the Payments Vision Delivery Committee published the Payments Forward Plan, setting out a clear and coordinated regulatory roadmap for the payments sector over the next three years. Developed jointly by HM Treasury, the Bank of England, the Financial Conduct Authority, and the Payment Systems Regulator, the plan builds on the strategic direction established by the government’s National Payments Vision.
While presented as a three-year roadmap, the Payments Forward Plan is not simply about incremental reform. It reflects a more ambitious attempt to rebuild the foundations that underpin how money moves, how trust is maintained, and how innovation is safely introduced into the financial system. Set against the National Payments Vision, the plan provides the clearest view yet of what that rebuild is intended to achieve, laying out a coordinated regulatory and infrastructure pathway across retail payments, wholesale markets, and digital assets.
From regulatory congestion to regulatory sequencing
One of the strongest signals in the plan is a recognition that the existing regulatory landscape has become congested. Overlapping responsibilities, multiple concurrent reforms and fragmented accountability have all contributed to uncertainty for firms and slower delivery of outcomes.
The proposed consolidation of the Payment Systems Regulator into the Financial Conduct Authority is therefore more than an institutional reshuffle. It is intended to create a more streamlined, predictable regulatory environment, reduce duplication and give firms clearer lines of engagement. Alongside this, the review and modernisation of payments and e-money legislation aims to replace inherited EU frameworks with a more agile, UK-specific regime that can evolve alongside technology.
Importantly, this work is not limited to technical tidying-up. The reform agenda explicitly considers how regulation should support tokenised payments, including stablecoins and tokenised deposits, how Strong Customer Authentication should evolve, how agentic AI-enabled payments might be accommodated, and how regulation can better support financial inclusion. The goal is not deregulation, but fit-for-purpose rules that can withstand rapid change.
Rebuilding the infrastructure of everyday payments
At the infrastructure level, the plan points towards a generational shift. A next-generation retail payments architecture is being designed to replace systems that were never intended to support real-time, data-rich and programmable payments at scale.
In the near term, this is complemented by targeted enhancements to Faster Payments and Bacs to improve resilience and better support account-to-account innovation. Over time, it extends into longer RTGS and CHAPS settlement hours, synchronisation experiments that allow assets and payments to move together, and wholesale trials to test whether existing systems can meet emerging market needs.
The Digital Securities Sandbox plays a particularly important role here. By enabling tokenised payments to be tested in live-like conditions, it allows regulators and industry to explore distributed ledger technology in a controlled environment, rather than relying on theory or offshore experimentation.
Digital assets move into the core conversation
Perhaps the most notable shift in tone is how digital assets are treated. Stablecoins, tokenised deposits and potential wholesale central bank money are no longer framed as peripheral innovations. They are considered alongside mainstream payment infrastructure, regulatory reform and financial stability objectives.
The digital pound remains in its design phase, but its positioning is telling. It is framed as potential public infrastructure, assessed on its systemic role rather than as a consumer product. This reflects a broader approach that views money, payments and settlement as shared utilities rather than isolated services.
Data, trust and inclusion as system design choices
Beyond rails and regulation, the plan places significant emphasis on trust. Sustainable Open Banking, interoperability with future Open Finance schemes, improved data sharing, fraud prevention, digital identity and a more proportionate AML regime are all treated as integral components of the payments ecosystem.
These are not bolt-ons. They shape who can participate, how risk is managed and whether innovation benefits consumers and businesses rather than undermining confidence. The same applies to work on safeguarding, consumer protection and access to cash, which recognises that inclusion and resilience remain essential even as payments become increasingly digital.
Speed versus system integrity
It is fair to acknowledge the growing frustration across industry that regulators are not moving quickly enough. In some areas, that criticism is justified. The pace of innovation in payments, digital assets and data-enabled finance is relentless, and delays do carry real economic and competitive costs.
However, reading the Payments Forward Plan in full makes clear the scale of what is being attempted. This is a multi-disciplinary transformation spanning law, supervision, infrastructure, competition policy, consumer protection, data governance and financial stability. Much of the work must be carefully sequenced, coordinated across multiple authorities and delivered without compromising trust in the system.
That does not mean progress should be slow. It does mean it has to be done right. What the plan ultimately signals is a shift away from reactive rule-making towards deliberate infrastructure-building. If delivered well, that approach may prove more valuable than speed alone.
If you would like to explore the entire plan, it is available to download here.
