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UK Prime Minister Keir Starmer has announced plans to dissolve the Payment Systems Regulator (PSR) as part of a broader initiative to streamline financial regulation and support business growth. The regulator’s responsibilities will be absorbed by the Financial Conduct Authority (FCA), aligning oversight of payment systems under a single entity.
The PSR, which oversees key payment networks such as Faster Payments and Mastercard’s infrastructure, functions similarly to the U.S. Consumer Financial Protection Bureau (CFPB). Starmer criticized the previous government for relying too heavily on regulators, arguing that excessive bureaucracy has stifled economic growth and placed unnecessary burdens on businesses.
“For too long, the previous Government hid behind regulators — deferring decisions and allowing regulations to bloat and block meaningful growth in this country,” Starmer stated. “And it has been working people who pay the price of this stagnation.”
While the announcement marks a significant shift in regulatory oversight, no immediate changes will take effect. The PSR will retain its statutory powers until Parliament enacts legislation to formalize the transition. In the interim, the PSR and FCA will work together to ensure a smooth transfer of responsibilities, with a focus on maintaining competition and efficiency within the payments ecosystem.
A statement from the PSR expressed support for the move, emphasizing its commitment to collaborating with the government, the FCA, and the Bank of England to facilitate the regulatory transition. The statement also highlighted ongoing efforts to align the PSR and FCA, including the recent appointment of the PSR’s managing director as the FCA’s executive director of payments and digital finance.
The decision to consolidate payment regulation under the FCA is part of Starmer’s broader strategy to refine financial oversight, ensuring that regulatory frameworks enable rather than hinder economic progress.
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