Payments market update
Summer 2025
The payments market continues to develop at pace with many interesting legal, regulatory and industry developments.
Here’s a consolidated update to kick-off Summer 2025:
The recent launches of AI-driven payments agents by Visa and Mastercard reflect the next step of AI’s integration into the payments ecosystem.
AI-driven payments agents can be used by consumers to execute transactions on their behalf. Despite these clear benefits, the introduction of AI payments agents creates new and novel legal and regulatory considerations.
In this insight, we set out what AI-driven payments agents do and the key legal issues that payment service providers and merchants need to be considering regarding their operation.
Following their joint Call For Information on the risks and opportunities presented by digital wallets and the role of “Big Tech” operators, the Payment Systems Regulator and Financial Conduct Authority have published a Feedback Statement.
Feedback was broadly positive, however areas of concern included potential regulatory gaps, barriers to competition for new digital wallet providers and resilience risks arising from operational failure of a digital wallet used by consumers.
In this insight, we examine the implications of this feedback and consider the next steps following its publication.
As concerns around financial exclusion continue to grow, the UK government has outlined a series of requirements aimed at improving transparency and protecting customers from unfair debanking.
Under the proposed Regulations, payment service providers will be required to give customers increased notice before termination, clear reasoning, and guidance on complaints.
In this insight, we take a closer look at these changes and consider how payment service providers can adapt their operations accordingly.
Further to our note on this topic within the Q1 update, the Financial Conduct Authority (FCA) has been seeking views on its proposed approach to the regulation of trading platforms, intermediaries, staking, lending and borrowing, decentralised finance, and the use of credit to purchase cryptoassets. The request for feedback follower the recent publication of a draft Statutory Instrument by HM Treasury, which serves to bring such activities into the FCA’s remit.
This Discussion Paper is relevant to a wide range of organisations and individuals that participate in the cryptoasset sector, and forms part of the FCA’s Crypto Roadmap, which sets out an indicative timeline for consulting on future cryptoasset regulation.
The deadline for responses closed on 13 June 2025. We expect the FCA to review submissions and set out next steps in due course. We will continue to track and report on future developments.
The payments market is starting to absorb the announcement that the Payment Systems Regulator will be abolished.
This insight sets out what this might mean and how this might impact ongoing work, for example relating to the ongoing review on the limits for contactless transactions.
Variable Recurring Payments have attracted increasing attention and recent developments have expanded their potential use cases in the form of Commercial Variable Recurring Payments.
This insight outlines where things currently stand in the world of Variable Recurring Payments, what’s next and how regulatory bodies are supporting the adoption of Commercial Variable Recurring Payments.
As developments in payment methods continue, legal and regulatory changes play a crucial role in allowing payments sector participants to maximise opportunities.
This insight set out some key points to be aware relating to the operation of “Buy Now, Pay Later” payment methods, Open Banking and digital wallets.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2025. Specific advice should be sought for specific cases. For more information see our terms & conditions.
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