The FCA has sent payment firms a letter setting out its priorities for firms supervised by the FCA in the payments portfolio. 

The National Payments Vision sets out the UK government's ambition for a trusted, world-leading payments ecosystem delivered on next generation technology, where consumers and businesses have a greater choice of payment solutions to meet their needs. It has three pillars: innovation, competition, and security, and highlights the importance of payments to the UK economy, including as a source of growth.

The FCA fulfils the function of the UK regulator for Open Banking, engaging closely with the Payment Systems Regulator (PSR) on payment system issues. It remains concerned that there are still risks of harm to consumers and financial system integrity. Accordingly, it has set out three key outcomes for firms, which it believes are essential to good customer outcomes:

• Effective competition and innovation to meet customers' needs, characteristics and objectives, considering innovation and the Consumer Duty.
  • Firms may wish to engage with the FCA's Innovation Hub support services and attend Tech and Policy sprints,
• Firms do not compromise financial system integrity, taking into account financial crime and operational resilience.
  • Firms should make sure they are ready for the end of the transition period (31 March 2025) to meet the strengthened operational resilience requirements,
• Firms keep customers' money safe, including safeguarding, prudential risk and wind-down planning.
  • Firms must make sure they identify relevant customer funds, conduct reconciliations at least daily and ensure customer funds are safeguarded in accordance with applicable requirements.

The FCA also emphasises the importance of governance, oversight and leadership. It states that weaknesses in these areas are a root cause of many of the regulatory issues.

• Firms need to make sure their governance arrangements and systems and controls, including reporting mechanisms, are effective and proportionate to the nature, scale and complexity of the business

The FCA also considers the future, and says that other policy priorities relate to Open Banking and Strong Customer Authentication.  The FCA actively encourages firms to engage with the FCA on future regulatory developments and commits to working with the PSR and Bank of England including through the Payments Vision Delivery Committee to deliver the Vision.