The Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) have issued a joint statement addressing the pricing models for open banking. They have clarified that they will not currently prioritize an investigation under the Competition Act 1998 into the centralized ‘access fee’ pricing model being developed by the UK Payments Initiative (UKPI) for commercial Variable Recurring Payments (cVRPs). cVRPs allow consumers to grant secure, recurring access to trusted third parties to manage payments on their behalf, offering potential benefits such as enhanced control and convenience.
Both regulators, after consulting with the Competition and Markets Authority (CMA), have decided not to prioritize a CA98 investigation into UKPI’s proposed commercial model. This decision provides UKPI with the certainty needed to continue developing its cVRP product, which includes applications for financial services, utilities, and public sector payments. On January 15, 2026, the FCA and PSR communicated their stance to the CMA, which confirmed on January 16, 2026, that it would align with their position. The CMA recognizes the importance of not deterring beneficial collaborations due to competition law uncertainties.
This approach serves as an interim measure until the anticipated legislative framework from the government is introduced, expected by the end of 2026, or until July 2027, whichever occurs first. During this period, the FCA and PSR will keep monitoring market developments and review any changes to the pricing methodology. They expect UKPI to submit its final governance documents. All three authorities—FCA, PSR, and CMA—may adjust their prioritization strategy if new information arises or if the legislative framework is delayed beyond July 2027.
The decision by the FCA and PSR marks a significant milestone in the advancement of open banking technologies, particularly for the UKPI. By not prioritizing a CA98 investigation, the regulators aim to foster innovation and ensure that the development of cVRPs continues without regulatory hindrances. This move aligns with the broader strategy to enhance payment systems in the UK, promoting more efficient and cost-effective solutions for both consumers and businesses.
As the UKPI progresses with its cVRP model, industry stakeholders are closely watching how this could set a precedent for future regulatory approaches in the financial technology sector. The FCA’s and PSR’s stance provides a framework within which other fintech entities might operate, potentially influencing the development of similar payment solutions across different sectors. This regulatory clarity is expected to encourage further investment and collaboration within the industry, reinforcing the UK’s position as a leader in financial innovation.
The temporary nature of this regulatory position underscores the importance of the forthcoming legislative framework, anticipated by the end of 2026. Until its implementation, the FCA, PSR, and CMA will remain vigilant, monitoring the market and ensuring that developments align with consumer protection and competition standards. The anticipation of this legislation highlights the dynamic nature of the regulatory landscape, as authorities adapt to the rapid evolution of financial technologies.
Furthermore, the collaboration between the FCA, PSR, and CMA demonstrates a coordinated effort to balance innovation with regulatory oversight. By working together, these bodies aim to create an environment where new technologies can thrive while maintaining fair competition and protecting consumer interests. This joint approach is crucial as the financial industry navigates the complexities of integrating emerging technologies with existing regulatory frameworks.
The FCA and PSR’s statement emphasizes their commitment to fostering a supportive environment for financial innovations like cVRPs. This approach aligns with their broader strategy to encourage the development of open banking systems, which are seen as pivotal in modernizing the UK’s financial infrastructure. The decision not to prioritize a CA98 investigation at this stage reflects a calculated effort to allow the UK Payments Initiative to continue its work without facing immediate regulatory barriers.
In a letter dated January 15, 2026, addressed to the Competition and Markets Authority, the FCA and PSR outlined their rationale for not prioritizing the investigation. The CMA’s subsequent agreement on January 16, 2026, underscores a unified regulatory approach aimed at minimizing disruptions to the development of new payment technologies. This collaboration among the regulatory bodies is crucial for maintaining a balance between fostering innovation and ensuring robust market competition.
As the UK Payments Initiative advances its commercial Variable Recurring Payments model, the focus remains on maintaining transparency and accountability. The FCA and PSR have indicated that they will require UKPI to submit its finalized governance documents, ensuring that the initiative adheres to established regulatory standards. This requirement is part of ongoing efforts to monitor the evolving landscape of payment technologies and ensure that new models operate within a framework that protects consumer interests.
The regulatory bodies have also highlighted the temporary nature of their current stance, which will remain in effect until the expected legislative framework is introduced by the end of 2026, or until July 2027, whichever comes first. This timeline provides a clear window for the UKPI to refine its payment model while operating under a defined regulatory environment. The anticipation of new legislation reflects the dynamic and evolving nature of financial regulation, as authorities work to keep pace with technological advancements in the sector.
The FCA and PSR have emphasized that their decision not to prioritize an investigation is aimed at supporting ongoing innovation within the financial sector. By allowing the UK Payments Initiative to focus on the development of its commercial Variable Recurring Payments without the immediate concern of a competition investigation, the regulators aim to facilitate an environment conducive to technological advancement. This approach is intended to provide businesses with the confidence to invest in new payment solutions, as stated by the FCA on January 20, 2026.
In addition, the collaboration between the FCA, PSR, and the CMA highlights the importance of a unified regulatory framework in addressing emerging financial technologies. This coordinated effort is crucial in navigating the complexities associated with open banking and ensuring that new payment models comply with existing competition laws. The CMA’s agreement on January 16, 2026, to align with the FCA and PSR’s position further underscores this collective regulatory strategy.
The UK Payments Initiative’s progress with its cVRP model is also closely monitored by industry observers, who see this as a potential blueprint for future open banking solutions. The FCA’s request for UKPI to submit its finalized governance documents ensures that the initiative’s development remains transparent and accountable. This requirement is part of the regulators’ broader strategy to maintain oversight while allowing innovation to flourish within a structured framework.
As the financial sector continues to evolve, the FCA and PSR remain committed to adapting their regulatory approaches to support emerging technologies. The anticipated legislative framework, expected by the end of 2026, will play a critical role in shaping the future of open banking in the UK. Until then, the regulators’ current stance provides a temporary yet essential foundation for the ongoing development of new payment systems, as outlined in their joint statement issued on January 20, 2026.
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