Published: January 22, 2026
The UK payments industry just put its cards on the table. The Payments Association released its 2026 manifesto at the House of Commons with 77 policy recommendations that could reshape how payment institutions operate over the next two years.
If you’re running a payment business, or thinking about buying or selling a payment institution, this matters more than you might think.
What’s Actually in the Manifesto
The Payments Association didn’t hold back. Their manifesto covers five major areas that directly impact licensed payment firms:
Cross-border payments get top billing. The manifesto pushes for faster, cheaper international transfers and better access to global payment rails. For Small Payment Institutions (SPIs) and Authorised Payment Institutions (APIs) focused on money remittance, this could mean lower barriers to entry and more competitive corridors.
Digital assets and stablecoins are moving from “maybe someday” to “regulate this now.” The manifesto calls for clear rules around stablecoin issuance and usage. Payment institutions looking to integrate crypto rails should watch this closely. Regulation is coming, and early movers who understand the rules will have an edge.
Open finance extends beyond open banking. The manifesto wants to expand API access to pensions, investments, and insurance products. For payment firms with account information service (AIS) capabilities, this opens new revenue streams.
Financial inclusion focuses on making payment services accessible to underserved communities. This aligns with FCA priorities and could influence how regulators assess applications for new licenses or change-of-control approvals.
Merchant payments recommendations target reducing costs and friction for businesses accepting payments. Card acquiring and payment initiation services could see regulatory changes that affect pricing and competition.
Why This Matters for Payment Institution M&A
Here’s the thing most people miss: policy changes directly affect the value of payment licenses.
When you’re buying or selling a payment institution, you’re not just trading a piece of paper from the FCA. You’re buying regulatory permissions, established relationships, and future revenue potential. Changes in policy can increase or decrease that value overnight.
The stablecoin angle is particularly interesting. Right now, very few UK payment institutions have clear authorization to handle digital assets. If the manifesto’s recommendations become regulation, firms that positioned themselves early could see significant valuation premiums. Conversely, traditional payment firms might need to invest in compliance upgrades.
API standardization around ISO 20022 could reduce integration costs between payment firms and banks. For buyers doing due diligence, this matters. You want to know if a target company’s tech stack is aligned with coming standards or if you’ll inherit a costly upgrade project.
SME regulatory representation is code for “regulators will listen to smaller firms more.” This is huge for SPIs, which have historically had less influence than major banks. Better access to policymakers means your concerns about compliance costs and operational requirements might actually get heard.
What Payment Businesses Should Do Now
Don’t just read the manifesto and file it away. Here’s your action plan:
Review Your Business Against Policy Priorities
Go through the 77 recommendations and flag anything relevant to your operations. Running a money remittance service? The cross-border payments section matters. Offering account information services? Focus on open finance recommendations.
This isn’t homework. It’s competitive intelligence. Understanding what regulators are likely to prioritize helps you make better strategic decisions.
Prepare for Consultations
The FCA, HM Treasury, and Payment Systems Regulator (PSR) will launch consultations on many of these topics throughout 2026 and 2027. Draft your positions now while you have time to think clearly.
Small and medium-sized payment firms rarely submit consultation responses. That’s a mistake. Regulators actively want industry input, and your perspective as an operating business is valuable. Plus, participating in consultations gets your firm on the radar of policymakers.
Consider M&A Timing
If you’re planning to buy or sell a payment institution in the next 12-24 months, the manifesto’s priorities should influence your timeline.
For sellers: Policy uncertainty can reduce valuations. If your firm is already compliant with likely future requirements (like ISO 20022 or preliminary stablecoin handling), now might be the time to market your “future-proof” compliance framework as a premium feature.
For buyers: The flip side is opportunity. Firms that haven’t invested in upgrading their infrastructure might be undervalued. If you have the resources to modernize post-acquisition, you could find bargains.
Build Regulatory Relationships
The manifesto emphasizes dialogue between industry and regulators. Start attending Payments Association events, join working groups, and build relationships with policy teams at the FCA and PSR.
This isn’t about lobbying. It’s about understanding regulatory thinking before changes hit the statute books. Payment firms that engage early have time to adjust; firms that wait for final rules often scramble.
The Bigger Picture: UK Payments Strategy
The manifesto doesn’t exist in a vacuum. It aligns with the UK government’s broader fintech strategy and post-Brexit regulatory approach.
The UK wants to be competitive with the EU while maintaining flexibility to innovate faster. The manifesto’s recommendations support that goal by pushing for modernized infrastructure, clearer digital asset rules, and reduced friction in payments.
For payment institutions, this creates both pressure and opportunity. Pressure to invest in compliance and technology. Opportunity to differentiate through innovation and early adoption of new standards.
How This Affects Different License Types
Small Payment Institutions (SPIs) get more attention in this manifesto than previous policy documents. The emphasis on SME regulatory representation suggests the FCA may be more receptive to SPI applications and concerns going forward. However, SPIs will still face transaction limit restrictions. The manifesto doesn’t propose changing those caps.
Authorised Payment Institutions (APIs) with cross-border operations should pay special attention to the international payments recommendations. Enhanced access to SWIFT alternatives and faster settlement could reduce operational costs significantly. APIs with EU passporting rights might also benefit from clearer post-Brexit coordination mechanisms.
Electronic Money Institutions (EMIs) aren’t the primary focus, but open finance and digital asset recommendations apply to e-money issuers as well. EMIs considering expansion into payment services should monitor how these policies develop.
What Happens Next
The Payments Association will work with the FCA, HM Treasury, and PSR to advance these recommendations throughout 2026 and into 2027. Some will become formal consultations, others will inform ongoing regulatory reviews.
Timeline expectations:
- Q1-Q2 2026: Expect consultations on stablecoin regulation and cross-border payment improvements
- Q3-Q4 2026: Open finance expansion proposals likely to advance
- 2027: Implementation of early manifesto priorities, with full rollout into 2028
Not every recommendation will become policy. But the manifesto represents industry consensus, which carries weight with regulators already looking to modernize the UK payments landscape.
Frequently Asked Questions
What is the UK Payments Manifesto 2026?
The manifesto is a policy document from The Payments Association containing 77 recommendations for improving the UK payments sector. It covers cross-border payments, digital assets, open finance, financial inclusion, and merchant services.
How does the manifesto affect payment institution licenses?
The manifesto’s recommendations could lead to regulatory changes that impact licensing requirements, compliance costs, and operational capabilities. Payment firms should review relevant sections and prepare for upcoming consultations.
Should I submit responses to FCA consultations?
Yes. Regulators value input from operating businesses, especially smaller firms. Participating in consultations helps shape policy and demonstrates your firm’s engagement with regulatory development.
What are stablecoins and why do they matter for payment firms?
Stablecoins are digital currencies designed to maintain stable value, typically pegged to fiat currency. The manifesto calls for clear regulation, which could allow payment institutions to integrate stablecoin services legally, creating new revenue opportunities.
How does this affect buying or selling a payment institution?
Policy changes can increase or decrease license values. Firms aligned with likely future requirements may command premium valuations, while those needing significant upgrades might be undervalued, creating both risks and opportunities for M&A.
What’s the timeline for manifesto recommendations to become regulation?
Some recommendations may become consultations in Q1-Q2 2026, with early implementation starting in 2027. Full rollout of major changes will likely extend into 2028. Not all 77 recommendations will become policy.
Does the manifesto change SPI transaction limits?
No. The manifesto emphasizes better SME representation in regulatory processes but doesn’t propose changing the €3 million monthly transaction limit for Small Payment Institutions.
About This Analysis
This article is based on The Payments Association’s UK Payments Manifesto 2026, published January, 2026, and related policy research. For payment institutions navigating M&A, licensing, or strategic planning, understanding regulatory direction is critical to making informed decisions.
Looking to buy or sell a payment institution? Our step-by-step guide covers valuation, due diligence, and regulatory approval processes for SPIs and APIs in the UK and EU.
