The window to influence the next generation of UK payments regulation shuts at 11:59pm on 6 October 2026. HM Treasury's Modernising Payment Services Regulation consultation covers tokenised payments, open banking and agentic (AI-initiated) payments, and it will shape the rules every UK acquirer, PSP and merchant works under for years. Consultations like this are usually dominated by banks, lawyers and trade bodies. A short, practical response from a merchant carries more weight than most people expect.

Why a merchant response is worth the time

The proposals would move much of the detailed regime out of legislation and into the FCA Handbook, and fold oversight into a single regulator. That makes the rules faster to change, which is a benefit when fraud patterns move quickly and a risk when merchants have little warning of what a change will cost them. The authors of the consultation have to weigh competing inputs, and merchants are the group most likely to be affected by decisions on pricing, liability and checkout design, yet the least likely to write in.

Responses go to Modernisingpaymentservices@hmtreasury.gov.uk or by post to the Payments & Fintech team at HM Treasury, Horse Guards Road, SW1A 2HQ. You do not need to answer every question. Responding to the two or three that touch your business is perfectly acceptable.

The questions that matter most to merchants

If you only have an hour, focus on the areas where the answer changes your costs, your risk or your customers' experience:

  • Open banking charges: the consultation raises the possibility of banks charging for certain premium access services. If you are weighing up Pay by Bank as an alternative to card processing fees, say what price points would make it viable and what would not.
  • Variable recurring payments: a statutory access right would help subscription and repeat-billing businesses. Explain how you bill today and what protections you would need around disputes and refunds.
  • Liability for AI-initiated payments: if an agent buys on a customer's behalf, who carries the loss when it goes wrong? Merchants should be clear that they should not be left holding fraud risk they cannot control.
  • Authentication at checkout: if strong customer authentication moves into FCA rules, tell the regulator where friction costs you sales and where it genuinely stops fraud.

How to write a response that gets read

Lead with who you are: your sector, your size, roughly how many card payments you take and whether you sell online, in person or by phone. Then pick a question, state your view in a sentence, and back it with one real example, such as a chargeback you could not contest or a checkout step that cost you conversions. Concrete numbers help; where you quote a figure, say where it comes from. Keep it to a page or two. If you sell through an industry body such as a retail, hospitality or accountancy association, ask whether it is submitting a response and add your own evidence to it.

What to do after you respond

The consultation is the start of the process, not the end. Expect draft legislation and FCA rule proposals to follow, and with the Payment Systems Regulator being absorbed into the FCA, the same regulator will soon oversee both conduct and card-fee issues. In the meantime, benchmark what you pay today so you can judge whether future changes help or hurt: your blended rate, your scheme and processing fees, and your settlement times.

Monek is an FCA-authorised payment institution (FRN 920628) providing a UK payment gateway with card processing from 0.99% blended, next-day settlement, Virtual Terminal and Pay by Link, a free WooCommerce plugin and native Xero integration. If you would like a clear picture of your current costs before the rules change, our team will run a no-obligation rate comparison and talk it through in plain English.