Roles and responsibilities in payments regulation

How the regulatory remits of the Bank of England, FCA, Payment Systems Regulator and the Prudential Regulation Authority fit together in the regulation of payments in the UK.

Read the Memorandum of Understanding (PDF) [1]

Roles and responsibilities

The Bank of England (the Bank), the FCA, the Payment Systems Regulator (PSR) and the Prudential Regulation Authority (PRA) (together, the Authorities) each have a role in the regulation of payments in the UK.

The Memorandum of Understanding (MoU) sets out how the Authorities will work together and co-ordinate the exercise of our relevant functions.

To complement the MoU, the Authorities have set out further information on this page explaining how our objectives, regulatory remits and key workstreams fit together. This is based on the regulatory roles and responsibilities of the Authorities at the time of publication, June 2025.

In March 2025, the Government announced its intention to consolidate the functions of the PSR primarily into the FCA. This will help streamline the regulatory environment and improve coordination and clarity on regulatory responsibilities.

The Government has been clear that there will be no immediate changes to the PSR's remit or ongoing work programme. Therefore, this page reflects the PSR's current responsibilities.

The Authorities will review and update this page, at least annually.

As noted in the MoU, the Bank performs a number of operational roles in relation to payments. Those activities are out of scope of this page, which focuses on the Bank as a supervisor of payment systems, rather than its role as a payment system operator.

This page is not exhaustive. The Authorities may have other responsibilities and powers which are not covered on this page.

The Authorities' objectives

This table provides an overview of the objectives and relevant principles of the Bank, the PRA, the FCA and the PSR. Please note, the descriptions in the table are summarised from the relevant legislation.

		The Bank	PRA	FCA	PSR
Key focus		Financial stability.	Safety and soundness of systemic firms.	Ensuring relevant markets function well.	Competition, innovation and payment system users.
Objectives	Financial stability	The Bank's primary objective is to maintain financial stability through ensuring the resilience of systemic payment systems.	The PRA's primary objective is to maintain the safety and soundness of PRA authorised firms. In doing so, it should ensure the business or failure of those firms avoids adversely affecting UK financial stability.	The FCA has a strategic objective to ensure relevant markets function well.	The PSR must have regard to the importance of maintaining the stability of, and confidence in, the UK financial system.
	Competition	-	The PRA has a secondary objective to facilitate effective competition in the markets for services provided by PRA-authorised firms.	The FCA has an operational objective to promote effective competition in the interests of consumers.	The PSR's statutory competition objective is to promote effective competition in the markets for payment systems and services between operators, PSPs and infrastructure providers.
	Innovation	-	The PRA must have regard to creating a regulatory environment which facilitates growth through supporting competition and innovation.	The FCA has an operational objective to promote effective competition in the interests of consumers.	The PSR's statutory innovation objective is to promote the development of, and innovation in, payment systems, in particular the infrastructure used to operate those systems.
	Market integrity	-	-	The FCA has an operational objective to protect and enhance the integrity of the UK financial system.	-
	Service-user/consumers	-	-	The FCA has an operational objective to secure an appropriate degree of protection for consumers.	The PSR's statutory service-user objective is to ensure that payment systems are operated and developed in a way that takes account of, and promotes, the interests of those who use, or are likely to use, services provided by payment systems.
	Growth/international competitiveness	While the Bank’s secondary innovation objective applies to the exercise of FMI functions relating to CCP and CSD policy, we are committed to facilitating innovation in the FMI ecosystem more broadly.	The PRA has a secondary objective to facilitate the international competitiveness of the UK economy and its growth in the medium to long term (subject to aligning with relevant international standards). The PRA must have regard to the desirability of sustainable growth in the UK economy in the medium or long term.	The FCA has a secondary objective to facilitate the international competitiveness of the UK economy and its growth in the medium to long term (subject to aligning with relevant international standards). The FCA has a regulatory principle to have regard to the desirability of sustainable growth in the UK economy in the medium or long term.	The PSR must have regard to the desirability of sustainable growth in the economy of the United Kingdom in the medium or long term.

The Authorities' regulatory remits by firm type

The MoU relates to the Authorities' relevant functions, as defined in section 98(5) of the Financial Services (Banking Reform) Act 2013 (FSBRA).

This table sets out those functions, and the regulatory remits of the Authorities, in respect of an illustrative selection of firm types. The MoU sets out how the Authorities will cooperate where a firm falls within the remit of one or more Authority.

		The Bank	PRA	FCA	PSR
Relevant functions (see section 98(5) FSBRA)		Part 5 and 5A Banking Act 2009¹	S.2AB(3) FSMA 2000	FSMA 2000 Part 3 Payment Card Interchange Fee Regulations 2015 Electronic Money Regulations 2011 Payment Services Regulations 2017	Part 5 Financial Services (Banking Reform) Act 2013² Part 2 of the Payment Card Interchange Fee Regulations 2015
Regulatory remit (by firm type)	Payment system - Operators	Yes	-	-	Yes
	Payment system - Infrastructure providers	Yes	-	-	Yes
	Payment service providers:	-	Yes	Yes	Yes
	Electronic money institutions	-	-	Yes	Yes
	Payment institutions (including money remitters, payment card issuers and merchant acquirers)	-	-	Yes	Yes
	Open banking firms (payment initiation service providers and account information service providers)	-	-	Yes	Yes
	Credit institutions/deposit takers	-	Yes	Yes	Yes
	Digital settlement asset issuers³	Yes	-	Yes	Yes⁴
	Digital settlement asset custodians³	Yes	-	Yes	Yes⁴
	Wholesale cash distribution	Yes	-	-	-

Footnotes

Firms will only enter the Bank's regulatory remit once they are systemic and recognised by the Treasury, pursuant to section 184 and 184A of Part 5 of the Banking Act 2009 (for payment system operators, specified service providers and DSA service providers) and section 206G of Part 5A of the Banking Act 2009 (for wholesale cash distribution).
The PSR regulates payment systems designated by the Treasury, in accordance with sections 43-45 FSBRA and the participants in those designated systems ie payment system operators, infrastructure providers and payment service providers. The PSR's competition powers are available even if the system is not designated. To the extent it relates to payment systems, an EMI and a payment institution (eg acquirer) would be a participant.
Digital settlement asset (DSA) issuer and custodian includes stablecoin issuer and custodian respectively.
The meaning of 'payment system' in FSBRA was updated in 2023 to make explicit that it covers a payment system that transfers digital settlement assets (DSA). A payment system transferring DSA (including, for example, Stablecoin) is therefore capable of being designated by the Treasury to allow the PSR to exercise its regulatory functions over participants (which would include a stablecoin issuer and custodian). The PSR's competition functions would be available in respect of a payment system involving the transfer of DSA even if not designated.

Clarifying our responsibilities for different activities

This diagram sets out the roles and responsibilities of each Authority across key payments-related workstreams.

It highlights areas where responsibilities are distinct as well as where they are shared or overlapping, providing a clear picture of who does what across the regulatory landscape.

See the diagram (PDF)[2]

First published: 24/06/2025 Last updated: 24/06/2025