On 14 July 2026, HM Treasury (HMT) published its planned consultation on wider reforms to the payment services regulatory regime. Key proposals include:

Updating existing regulatory requirements / Providing for tokenised and agentic payments

• HMT is keen for stakeholders’ thoughts on updates to the existing legislation – both for the key areas of reform already under consideration and more generally – as it looks at which provisions should be moved into the FCA’s Handbook to create a more agile and outcomes-focused regime and which international regulatory developments should be incorporated into the new framework - with specific reference to the EU’s PSD3 and Payment Services Regulation.
• HMT proposes a single set of regulated payments activities for both tokenised and non-tokenised payments by merging or splitting some of the regulated payment services currently in Schedule 1 of the Payment Services Regulations 2017 (PSRs).
• Currently authorised or registered firms will need to apply to the FCA for variation of their regulatory permissions to provide tokenised payment services.
• There is a proposal that where a stablecoin has been issued in the UK within the rules for the new regulated activity of issuing a qualifying stablecoin in the UK under Article 9M of the Regulated Activities Order (RAO), it can be treated as “money-like” for the purposes of payments and brought within the payments perimeter.
• Article 9M UK-issued qualifying stablecoins would be carved out from the cryptoasset intermediary activities for certain activities (dealing as principal, dealing as agent, and arranging deals) in advance of them being brought into payments regulation. A draft statutory instrument clarifying the scope of the new RAO intermediary activities in relation to UK-issued qualifying stablecoins was published in April this year (see this Our Thinking article).
• Safeguarding of Article 9M UK-issued qualifying stablecoins for the purposes of payments should eventually be regulated under the payments regime and not the cryptoassets regime. The government will set out its approach to interim safeguarding requirements (ie for the period from the entry into force of the new cryptoassets regulatory regime on 25 October 2027 to implementation of the payments reforms) when it provides an update on the cryptoassets draft legislation.
• HMT is looking for stakeholders’ input on how the existing payment services regulation (for example, relating to authentication standards and liability requirements) needs to adapt to support agentic payments developments.
• The potential for enhanced accountability of senior managers in the payment services and e-money sector to support better management of financial crime risks is also under consideration.

Long-term regulatory framework for Open Banking

• In relation to the existing Open Banking-related provisions in the PSRs:
  • A new third-party right of access in relation to variable recurring payments (VRPs) would be established; and
  • The FCA would be given powers in relation to the pricing of new Open Banking products and services outside commercial schemes, and would be able to determine whether any access currently required to be provided for free by account servicing payment service providers (ASPSPs) under the PSRs and the CMA Order should transition to a commercial basis (except in relation to “sweeping”).
• In relation to establishing an updated framework under the Data (Use and Access) Act 2025 (DUAA) regarding how account access is facilitated, the FCA would have the power to:
  • require each scheme and their respective participants to establish a centralised pricing model;
  • make rules which set guardrails for scheme pricing, for example, to require fair and transparent pricing; and
  • intervene directly to set a general limit or cap on pricing or to impose requirements for an individual scheme (for example, along the lines of its product intervention powers under section 137C of the Financial Services and Markets Act 2000 (FSMA), or the Payment System Regulator’s price regulation powers).

The consultation closes on 6 October 2026.

For more on the consultation, take a look at this Our Thinking article.

On 2 July 2026, HM Treasury (HMT) published a Payments Vision Delivery Committee (PVDC) update setting out the shared thinking of HMT and the relevant authorities (including the Bank of England (BoE), the FCA and the Payment Systems Regulator (PSR)) to guide engagement with stakeholders in the payments ecosystem on future roles, responsibilities and interactions with respect to the future core infrastructure for UK retail payments. The PSR also published a related press release. The high-level update supports the Retail Payments Infrastructure Board’s (RPIB) June 2026 consultation on the design of the future retail payments infrastructure (as to which, see the June 2026 edition of our Newsletter).

Key topics covered include:

• Role of core infrastructure scheme and its operator: Given the role of the core infrastructure as a shared utility for the payments ecosystem, it is expected to be delivered by a centralised operating model. The core infrastructure will continue to be regulated by the PSR (the FCA in the future) and the BoE. The operator is expected to fall within relevant regulatory frameworks for systemically important payment systems and financial market infrastructures (FMIs).
• Role of product level arrangements: The ecosystem’s payment journeys and related services would be delivered on top of the core infrastructure. Where a payment product is offered by multiple payment service providers (PSPs), common product level arrangements may be needed (in a product scheme) to ensure payments work reliably, consistently and at scale. Over time, this is where greater competition will emerge, alongside critical payment journeys that will need to achieve scale, interoperability and widespread adoption.
• Commercial sustainability for innovation: Commercial sustainability across each layer of the ecosystem will be key to achieving the PVDC Strategy. In general, commercial arrangements across the ecosystem should support outcomes that are fair, transparent and sustainable, and enable effective competition while supporting innovation and broad participation. They should also be consistent with wider objectives, for example, effective risk management.
• Consumer protection, fraud, and wider financial crime: The infrastructure will need to enable compliance with consumer protections set out in regulation, as well as in scheme rules. Interactions with emerging technologies and innovations will need to be considered. Both the core infrastructure scheme and product level arrangements should enable higher levels of protection to be built in where needed. The core infrastructure scheme should seek to design out financial crime.

As the RPIB and the industry-led DeliveryCo take forward work on the design and delivery of the core infrastructure, the PVDC will continue to engage with stakeholders across the payments ecosystem on the issues outlined in the update.

On 1 July 2026, the Payment Systems Regulator (PSR) published a technical report and summary report on the findings from Frontier Economics’ independent evaluation of its authorised push payment (APP) scam policies, together with a roadmap setting out the scope and timing of its planned further work to address APP fraud.

The evaluation assessed the impact of two PSR policies to address APP fraud: the mandatory reimbursement requirement (in force since October 2024); and publication of APP fraud performance data (first published in October 2023). The evaluation was conducted between September 2025 and June 2026, so the findings should be interpreted as evidence of short-term impacts only. Relevant points from the key findings include:

• UK APP fraud fell materially, and the pattern of reduction indicates the reimbursement requirement was a key driver behind it;
• While reimbursement has increased and fewer funds have been lost to APP scams, outcomes remain inconsistent across payment service providers (PSPs);
• International APP scams have increased. Qualitative evidence indicates that fraudsters are adjusting their tactics and shifting APP fraud to out-of-scope channels (for example, crypto fraud); and
• The report highlights that some stakeholders argued that, by placing incentives to tackle APP fraud primarily on PSPs, rather than on the wider fraud ecosystem, including online platforms and telecoms companies where much APP fraud originates, the reimbursement requirement may not target all parts of the ecosystem best placed to reduce overall APP fraud levels.

According to its roadmap, the PSR’s next steps are:

• August 2026: Engagement with industry and consumer representatives to support development of its APP scam policy. Discussion topics will include treatment of some types of investment scams and the 13-month reporting requirement;
• December 2026: Consultation on policy proposals and any necessary amendments to relevant legal instruments, to include: proposals on policy parameters; considering how to use data to drive outcomes; considering whether there are other policy areas requiring further clarification, including guidance on application of the Consumer Standard of Caution, civil disputes and me-to-me transactions;
• December 2026: Publication of a data report on platforms and services commonly used for APP scams, covering 2024/2025 data; and
• May 2027: Confirmation of its decision following the December consultation, publication of revised legal directions and confirmation of an implementation date, which will be within six months of publishing the decision.

On 15 July 2026, the Home Office launched a call for evidence (CfE) on unauthorised fraud in the UK as the government undertakes a comprehensive review of the national response to unauthorised fraud. Key points include:

• Fraud is now the largest volume crime in England and Wales (46% of crime in the 2025 Crime Survey for England and Wales), with an estimated economic and social cost of £14.4bn. Bank and credit account fraud increased by 15% in the year ending December 2025, now representing around 66% of all fraud.
• Criminals are exploiting social engineering, weaknesses in authentication, and new technologies such as deepfakes and generative AI to bypass defences at scale. According to Experian, 35% of businesses knowingly encountered generative AI related fraud in 2025. The percentage of retail banks affected has more than doubled from one in five in 2024 to almost half in Q1 2025.
• The CfE is the first step by the government in developing a system-wide response to the system-wide threat of rising unauthorised fraud levels. It focuses on unauthorised card fraud (including remote purchase fraud, card‑not‑received, counterfeit, lost/stolen, card ID theft), unauthorised remote banking fraud (online, mobile, and telephone banking), and unauthorised cheque fraud.
• The government is seeking data, intelligence, case studies, operational insights, technical assessments, and evaluations of existing or proposed prevention measures.
• Evidence submitted may relate to a number of areas on which the CfE poses questions including: definitions and types of unauthorised fraud; criminal methodologies, tactics and emerging threats (including AI-enabled attacks); drivers and enabling factors of unauthorised fraud; technologies exploited (such as digital wallets and AI); weaknesses in current security mechanisms; authentication and digital identity challenges; industry response effectiveness; data‑sharing and intelligence challenges; trends in attack origination and multi-stage/channel fraud (eg, social media, telecoms compromise, data breaches); and policy, regulatory and future intervention options.

The government welcomes submissions from all stakeholders with relevant experience of unauthorised fraud in the UK including financial services providers, payment service providers (PSPs) and fintechs, and law enforcement and regulators. The CfE closes on 7 October 2026.

On 7 July 2026, the FCA published a “good and poor practice” webpage on its findings from mystery shopping with Basic Bank Account (BBA) providers, together with a press release.

Under the Payment Accounts Regulations 2015 (PARs), the nine largest standard personal current account providers in the UK must offer BBAs to legally resident consumers who either do not have a UK bank account or are not eligible for all other payment accounts.

Key FCA findings include:

• Firms did not consistently identify and discuss BBAs early enough: Firms often directed consumers to a standard personal current account first, only introducing the BBA after additional checks or likely rejection from the standard personal current account route. This creates avoidable friction and increases the risk that consumers are not guided promptly to the most appropriate account for their circumstances;
• Firms created avoidable barriers for consumers with non-standard identification or no fixed address: Staff often struggled to explain acceptable alternatives or next steps; and
• Staff did not consistently recognise and respond to characteristics of vulnerability or adapt support: Support was too often reactive rather than tailored and proactive.

The FCA requires all nine designated firms to deliver measurable improvements in consumer outcomes urgently, at both firm and sector level. The FCA has given all firms specific feedback and asked each to develop remedial plans.

Through UK Finance, the firms have also agreed a collective commitment to address the issues identified, focusing on three priority areas: (1) identifying and offering BBAs promptly, (2) removing barriers for consumers with non-standard identification or no fixed address, and (3) recognising and responding to characteristics of vulnerability and avoiding unsuitable online-only journeys.

Firms will work through UK Finance to monitor progress, share learning and identify further opportunities for improvement. UK Finance will lead a sector-wide review process, including: (1) after six months, a review of progress against the commitments to identify emerging themes and examples of good practice; and (2) after 12 months, a broader sector review of progress, customer outcomes and any areas requiring further industry focus.

Following each sector review, UK Finance will provide the FCA with a summary of progress, emerging themes and areas of ongoing focus. The FCA will continue to review and monitor each firm’s remedial plans and follow up with them as needed. The FCA will monitor progress closely and will take further action as appropriate.

On 16 July 2026, the Wolfsberg Group published guidance aimed at providing a risk-based framework to help banks assess and manage the financial crime risks arising from provision of banking services to non-bank payment service providers (PSPs). The guidance discusses common relationship types, associated risks, compliance obligations and risk management expectations for financial institutions when they provide services to non-bank PSPs. An appendix contains a number of diagrams of third-party payment flows for non-bank PSPs aimed at highlighting the complexity of those PSPs' business models over a range of scenarios, with varying levels of intermediation and payment methods.

The guidance is intended to complement existing Wolfsberg work on correspondent banking, its October 2023 payment transparency standards (as amended) and its accompanying guidance on payment transparency roles and responsibilities.

On 23 July 2026, the EBA announced the publication of four consultation papers concerning draft regulatory technical standards (RTS), implementing technical standards (ITS) and guidelines supplementing the Deposit Guarantee Schemes Directive (2014/49/EU) (DGSD) and reflecting revisions made to it by the DGSD III Directive ((EU) 2026/804):

• Consultation paper on guidelines on investment of available financial means: the draft guidelines specify how deposit guarantee schemes (DGSs) should set and implement investment strategies supporting the availability of funds for payouts or other DGS interventions.
• Consultation paper on ITS on depositor information: the ITS specify the content and format of the depositor information sheet and other communications to depositors from designated authorities, DGSs or credit institutions.
• Consultation paper on ITS on information exchange: the ITS specify minimum requirements for exchanging information required under the DGSD between credit institutions, DGSs, designated authorities and the EBA.
• Consultation paper on RTS on DGS payouts of client funds deposits: the RTS specify requirements for identifying clients for repayment purposes, the criteria and circumstances in which repayment should be made to the account holder or directly to the client, and the rules to avoid multiple claims for payouts to the same beneficiary.

The consultations close on 23 October 2026. The EBA intends to submit the final version of the draft RTS to the European Commission in Q4 2026. The RTS, ITS and guidelines are intended to apply from 11 May 2028 (ie, the date on which member states are required to apply most of the amendments made by the DGSD III Directive).

As reported in the June 2026 edition of our Newsletter, last month the EBA published a roadmap on its approach to delivering mandates under the revised DGSD, announcing that it would produce the mandates in three separate batches.

On 7 July 2026, the FCA published the second issue of its Enforcement Watch newsletter, which provides insights from its recent enforcement work. Key points covered include:

• The Consumer Duty “in action”: This issue focuses on how the regulator is using the Consumer Duty to improve customer outcomes through assertive supervision and enforcement.
• Interventions: The FCA intervened 382 times in the last financial year through “assertive supervision”, ranging from conversations with firms to the imposition of formal requirements. It also highlights its use of section 166 skilled person reviews. Recent interventions have focused on issues including lack of fair value, failure to act in good faith and failure to avoid foreseeable harm across multiple sectors.
• Enforcement: The FCA reports a steady increase in Consumer Duty-related enforcement activity. Current investigations focus on issues including fair value, consumer support, consumer understanding and the treatment of vulnerable customers.

The FCA concludes by reminding firms that it expects them to identify and prevent harm, and provide evidence of good consumer outcomes. While it states that it will continue to take a pragmatic approach where firms do the right thing, it will not hesitate to take enforcement action where necessary.

On 14 July 2026, HM Treasury (HMT) published an update setting out key milestones achieved in the first year of the government's ten-year Financial Services Growth and Competitiveness Strategy.

Among other things, the update notes that particular areas of ongoing focus for the strategic pillar that relates to “embracing innovation and leveraging the UK’s FinTech leadership” are:

• Digital assets, where the government, regulators, and industry are progressing the major opportunity to modernise markets, payments, and financial infrastructure, including through the work of the Wholesale Digital Markets Champion, Chris Woolard CBE (see the separate item on the Champion’s first report under ‘Regulatory Developments: Digital Assets’ below);
• AI, where the UK is ‘committed to being the fastest adopter of AI in the G7’ and key milestones include the Financial Services AI Champions’ publication of an AI Adoption Plan (see the separate item on this); and
• Helping innovative firms to start, scale, and stay in the UK, with examples of relevant initiatives including provisions in the Financial Services and Markets Bill 2026-27 facilitating introduction of a provisional licences authorisation regime, the launch of the joint FCA and PRA Scale-up Unit in October 2025, and the government’s announcement of a package of measures on 14 July 2026 to increase access to finance for growing businesses.

For more on the Strategy, take a look at this previous Our Thinking article.

On 10 July 2026, the FCA published its findings from a review of firms’ approaches to the products and services outcome under the Consumer Duty.

The FCA set out examples of good practice and areas for improvement in the three areas below. It also considered firms’ approaches to customers in vulnerable circumstances and provided examples relevant to smaller firms. Key areas for improvement include:

• Product and service design, and target market: defining target markets at an appropriately granular level and considering how to better meet the needs of vulnerable customers.
• Monitoring and review: using management information (MI) to trigger targeted reviews and validating changes to products and customer journeys.
• Distribution and third parties: providing full evidence and measuring and quantifying the effectiveness of distribution strategies.

The FCA expects firms to use the findings to review their own approach and, where relevant, identify possible improvements. The FCA is also consulting on changes to how the Consumer Duty applies in consultation CP26/23 (see the June 2026 edition of our Newsletter), and firms may wish to review this before making major process changes. Firms subject to the Product Intervention and Product Governance sourcebook (PROD) are encouraged to review the examples and consider if they could improve their own practices.

On 27 July 2026, the FCA published its findings following a review of firms' approaches to monitoring outcomes under the Consumer Duty, together with a related blogpost.

The FCA reviewed 56 firms across different sectors, with a range of sizes and business models. It assessed board reports and responses to information requests to understand how firms monitor customer outcomes, use management information (MI) and oversee their monitoring through governance structures.

Overall, the FCA found the strongest approaches were structured and evidence-based, and focused on how firms can use monitoring information to improve customer outcomes.

The FCA shared examples of good practice and areas for improvement. The main areas for improvement include:

• Strategy and framework: Some firms' monitoring frameworks were not clearly focused on customer outcomes or the risks of harm. Although firms often described monitoring at a high level, they did not have a clear structure for identifying poor outcomes or understanding why they occurred. Some firms defined good customer outcomes at a broad level but did not clearly link them to key stages of the customer journey.
• Data, MI and testing: Some firms had a narrow or reactive set of indicators, making it harder to identify risks or assess customer outcomes. They often collected a range of data but did not consistently demonstrate how they used it to anticipate issues, track outcomes or assess the effectiveness of changes they had made. Firms sometimes relied on lagging indicators, lacked clear thresholds or forward-looking metrics, or did not maintain complete audit trails from identifying an issue through to action and outcome.
• Governance, oversight and culture: It was not always clear how governance arrangements operated end-to-end, from identifying issues through to testing if actions have improved outcomes. Some firms appeared to receive limited challenge and direction from their boards.

The FCA emphasised that it expects all firms, regardless of size, to deliver good outcomes for their customers and has published specific review findings for smaller firms.

Firms are expected to use the review to assess their own approach and consider whether the information they collect provides a sufficiently clear view of customer outcomes.

On 8 July 2026, the Financial Services and Markets Bill 2026-27 (the Bill) completed its committee stage in the House of Lords, which involved a detailed line-by-line examination of the Bill.

Key topics considered and related amendments tabled include:

• FCA rules on consumer credit – proposals for the removal of changes to the Consumer Credit Act 1974 in the Bill.
• Decisions on in-person banking services – proposed amendment to ensure any intervention is evidence-based, proportionate and balanced, taking account not only of consumer interests but also of legitimate commercial considerations.
• Functions of the Financial Ombudsman Service (FOS) – proposed amendment requiring regulations governing referrals from the FOS to the FCA to include, among other things, a 30-day time limit for FCA opinions (subject to specified exceptional circumstances).
• Fraud reimbursement by technology companies – proposed insertion of a new provision requiring the FCA to make rules under which, where a person is to be reimbursed for losses arising from APP fraud, the cost of reimbursement is to be borne, in whole or in part, by any relevant technology company on whose service the fraud was initiated, facilitated or communicated.
• FCA rules on AI in financial services – proposed amendment requiring the FCA to make rules in relation to AI in financial services.

Further detailed examination of the Bill will continue at report stage, which is scheduled to begin on 7 September 2026.

For more on the Bill, see this Our Thinking article and the May 2026 edition of our Newsletter.

On 9 July 2026, the Payment Systems Regulator (PSR) published its annual report and accounts for 2025/26, together with a press release. Key progress made by the PSR in the past year includes:

• Fairer deals for businesses and consumers: it has continued its work to promote fairer card payment costs, for example by introducing new requirements on Mastercard and Visa scheme and processing fees;
• Protecting consumers from fraud: the PSR’s APP fraud measures resulted in £243 million being reimbursed to victims and a reduction in APP fraud;
• Open banking goes mainstream: it has supported more than 16 million users, together with the FCA, through the rollout of variable recurring payments and the establishment of the UK Payments Initiative;
• Laying the groundwork for the future: the PSR has worked with HM Treasury, the Bank of England and the FCA to advance the National Payments Vision, including near-term upgrades to Faster Payments and Bacs and the development of the future retail payments infrastructure; and
• Building the future of payments regulation: it has made good progress with the FCA on preparations for the proposed transfer of its functions to the FCA.

On 6 July 2026, the FCA published the outcome of its Mills Review (the Review) into the impact of AI on retail financial services, together with a press release. The Review was led by FCA Executive Director of Consumers and Competition, Sheldon Mills, and is described as the first review of its kind by a financial regulator globally.

Mills describes AI as offering “a once-in-a-generation chance to close the information asymmetries and frictions that have long left people making poor financial decisions”. He states that the desired outcome for financial services is to ensure that consumers can make healthy decisions, with regulation serving that outcome.

The Review identifies four major AI-driven shifts that are likely to impact retail financial services by 2030:

• The transformation of firm operations – firms embedding AI into almost every business function;
• The evolution of consumer journeys – consumer journeys will become agent-led;
• A reshaping of competition and market power – lower barriers to entry but risk of dependencies on AI suppliers; and
• The amplification of fraud and cyber risks – deepfakes, synthetic identities, easier cyber attacks.

Other key findings of the Review include:

• Consumer research: The Review finds consumer appetite already exists for agentic AI. FCA-commissioned research found that one in five UK adults are already open to AI making decisions for them, with demand strongest where choices feel complex or high-stakes, particularly debt advice, pensions and investments, and around 26 percent of people trust general-purpose AI tools for financial advice.
• Vulnerability & Consumer Duty: The Review signals that the FCA may look again at its Vulnerability and Consumer Duty guidance specifically through an AI lens, given risks of misinformation, unequal access to good AI tools and links to financial capability.
• Redress/complaints angle: Rising volumes of AI-generated (sometimes low-quality) complaints are already straining firms and the FOS, with potential future agent-to-agent complaint handling on the horizon. The Review notes that the FCA should consider the impact of AI on the redress system.

The Review sets out seven recommendations for the FCA Board and Executive under four themes, including:

• Regulatory frameworks and perimeter: securing and adapting the regulatory perimeter (including potentially seeking expanded powers under existing regimes, such as the Digital Markets, Competition and Consumers Act 2024); monitoring the transition to autonomous models and adapting regulatory frameworks;
• Supervision and co-ordination: strengthening system-wide coordination and oversight, including between regulators; building an AI-enabled agentic supervisory model;
• Foundations and capability: scaling up the FCA’s AI Lab to support AI innovation in financial services; enabling the foundations for agentic finance; and
• Consumer access and outcomes: developing a trusted public-interest AI financial capability service.

The FCA plans to publish an AI good and poor practice paper later this year, informed by direct engagement with firms. The FCA Board and Executive will consider the Review’s seven priority recommendations.

For more on the Review, see this Our Thinking article.

On 14 July 2026, HM Treasury (HMT) published an Financial Services AI Adoption Plan (the Plan). Developed by the government’s independent AI Champions for financial services, the Plan focuses on next steps for the government, regulators and industry to accelerate safe AI adoption and innovation in the financial services sector. The ten recommendations in the Plan span the regulatory framework, AI-powered financial advice and the regulatory perimeter, resilience, skills and talent, and agentic payments.

Agentic payments readiness (recommendation 10) is categorised as a high priority recommendation, which calls on the government, regulators and industry to ensure that the outcome of HMT’s consultation on modernising payment services regulation (see the separate item above) does not simply address the need for regulatory updates but also tackles the ‘complex, systemic challenges’ presented by the advent of agentic payments. In particular, it recommends the establishment of a “trust framework” of comprehensive standards to achieve safe adoption at scale. The standards should be built on three critical pillars:

• Legal and liability frameworks: Defining clear legal constructs and dispute mechanisms to unambiguously assign accountability when autonomous agents transact;
• Know Your Agent (KYA) protocols: Establishing standardised identity and verification frameworks specifically designed for AI and autonomous software agents; and
• Authentication and governance: Creating interoperable technical standards that ensure safe, frictionless, and trusted machine-to-machine authentication.

On 15 July 2026, the FCA updated its Buy Now Pay Later (BNPL) webpage, reminding firms that its Deferred Payment Credit (DPC) regime (also known as BNPL) came into force on 15 July 2026. From that date, any DPC lender entering into a DPC agreement must either be authorised for the relevant consumer credit activities or have temporary permission under the DPC temporary permissions regime, and must comply with the FCA's rules.

For more information on the new rules, see this Our Thinking article.

On 14 July 2026, the European Central Bank (ECB) announced that it had selected 36 payment service providers (PSPs) to participate in the digital euro pilot, following a March 2026 call for expressions of interest that attracted more than 50 applications. The selected PSPs represent a broad range of business models and sizes and offer broad geographical coverage across the euro area.

The pilot forms part of the ongoing preparatory work for the potential issuance of a digital euro and is intended to test the digital euro's technical functionality and operational processes, as well as refine the user experience. It will use a beta version of the digital euro that is functionally and technically close to the model envisaged under the draft legislation, although it will not have legal tender status.

The pilot will take place at the ECB and 19 national central banks. Participating PSPs will act as distributing PSPs, acquiring PSPs, or both. Distributing PSPs will enable Eurosystem staff to access and use beta digital euro services, while acquiring PSPs will allow selected merchants to accept beta digital euro payments. The pilot will test a range of payment scenarios, including online and offline person-to-person payments, and person-to-business payments at physical points of sale and through e-commerce channels.

The pilot is scheduled to begin in the second half of 2027 and run for 12 months. In preparation, the selected PSPs will work closely with the ECB and their respective national central banks. Progress updates will be published regularly on the ECB's dedicated webpage.

On 1 July 2026, it was reported that Turkey is interested in joining the EU's Single Euro Payments Area (SEPA), which currently covers 41 countries and aims to make cross-border euro payments cheaper, faster and more secure.

This follows Reuters' report earlier in the year that Turkey and the EU had been holding discussions regarding Turkey's potential participation in SEPA.

On 15 July 2026, the New York Department of Financial Services (NYDFS) published a notice of proposed rule making and the text of proposed regulations to formally establish a licensing and supervision framework for Buy Now Pay Later (BNPL) providers in New York.

Under the proposed regulations, a licence would be required for any firm wanting to act as a BNPL lender (unless exempt or already authorised). The proposed regulations set out the requirements for obtaining a licence or authorisation, as well as provisions relating to changes of control and other regulatory matters.

Public comments are invited until 14 September 2026.