1. Commercial VRP moves from theory to operator build
December marked a clear transition for commercial variable recurring payments (cVRP). In its year-end update, the FCA confirmed industry progress towards a commercial VRP scheme, supported by the creation of the UK Payments Initiative (UKPI) by 31 firms.¹ The FCA and PSR followed this with a dedicated update on delivery, setting out what has been achieved so far and what remains outstanding.²³
What happened
- The FCA positioned UKPI as the vehicle to take VRPs beyond sweeping use cases and into commercial payments.¹
- The FCA and PSR published a joint update on cVRP delivery, covering scope, sequencing and expectations.²³
- Open Banking Limited framed this as an industry milestone towards the UK’s first commercial VRP scheme.⁴
Why it matters
This is the point at which cVRP stops being a theoretical roadmap item and becomes an infrastructure commitment. Once an operator, rulebook and commercial model start to harden, misaligned implementations become expensive to unwind.
Asima’s view
Enterprise buyers should now be assessing suppliers on mandate governance, auditability, telemetry and scheme alignment, not just API coverage. cVRP will be won operationally, rather than by feature count.
2. Contactless caps are going, compensating controls remain
The FCA announced it will remove the fixed regulatory requirement for a single national contactless limit, allowing firms to set their own limits based on risk and customer protections.⁵
What happened
- Firms will have greater flexibility over contactless limits, provided they have appropriate fraud controls in place.⁵
- The FCA emphasised customer controls, including the ability to set personal limits or disable contactless payments.⁵
Why it matters
Contactless has always relied on compensating controls because strong customer authentication (SCA) is not inherent to the card rail. As limits become more flexible, issuers and schemes will lean further on behavioural analytics, step-up challenges and cumulative controls.
Asima’s view
This highlights the architectural difference with Pay by Bank and cVRP, where SCA is embedded at the bank layer. As contactless limits rise, the long-term cost and complexity of card-on-file models becomes harder to ignore. (More on this to follow in Thursday's blog post.)
3. Safeguarding reform remains firmly in focus
Safeguarding continued to be a regulatory priority in December, following the FCA’s publication of PS25/12, which sets out the final rules for the strengthened safeguarding regime for payments and e-money firms.⁶⁷
What happened
- The FCA confirmed final rules and implementation timelines for enhanced safeguarding requirements.⁶
- The focus is on better evidence, clearer reconciliations and faster return of customer funds if a firm fails.⁶
Why it matters
Safeguarding is no longer treated as a background compliance obligation. Regulators expect firms to demonstrate operational control, not just policy intent.
Asima’s view
For infrastructure providers and platforms, safeguarding readiness needs to be engineered into fund flows and reporting from day one. Manual reconciliations and opaque flows will not scale under the new regime.
4. Payments insolvency outcomes under review
HM Treasury published the final report of the independent review of the Payment and Electronic Money Institution Insolvency Regulations 2021 (PESAR), examining whether the special administration regime is meeting its objectives.⁸⁹
What happened
- The review assessed whether PESAR delivers timely and predictable return of safeguarded funds.⁹
- Legal and industry commentary highlighted areas where outcomes could be improved in real-world failures.⁸
Why it matters
PESAR exists because standard insolvency processes failed payment services users. The review shows continued scrutiny of how failures are handled in practice, not just in theory.
Asima’s view
For platforms and marketplaces, provider failure modes matter. Procurement should include a realistic assessment of insolvency handling, evidence quality and administrator interaction, not just uptime metrics.
5. Payments regulation continues to consolidate
The FCA and PSR jointly responded to HM Treasury’s recommendations on payments regulation, tying their approach back to the National Payments Vision and the future governance of open banking.¹⁰¹¹
What happened
- The PSR published the joint FCA/PSR response outlining how recommendations will be taken forward.¹¹
- The National Payments Vision remains the strategic anchor for UK payments infrastructure.¹⁰
Why it matters
Open banking and A2A payments are now being treated as strategic national infrastructure. That brings confidence for long-term investment, but also higher expectations around interoperability and rule compliance.
Asima’s view
The right strategy for 2026 is to build scheme-aligned, adaptable infrastructure that can absorb regulatory change without repeated rewrites.
Closing thoughts
December 2025 brought clarity. Commercial VRP gained delivery scaffolding, contactless changes exposed the ongoing cost of compensating controls in card rails, and regulators sharpened expectations around safeguarding and failure outcomes.
For Asima clients, the message is consistent: recurring payments and A2A at scale are infrastructure problems first, product problems second.
¹ Financial Conduct Authority. Open banking: a year of progress. Link
² Payment Systems Regulator. Commercial variable recurring payments update on delivery. Link
³ Payment Systems Regulator and Financial Conduct Authority. Commercial variable recurring payments – update on delivery (PDF). Link
⁴ Open Banking Limited. An industry first – the UK’s new commercial open banking scheme. Link
⁵ Financial Conduct Authority. Greater flexibility to be given for setting future contactless limits. Link
⁶ Financial Conduct Authority. PS25/12: changes to the safeguarding regime for payments and e-money firms. Link
⁷ Financial Conduct Authority. Policy Statement PS25/12 (PDF). Link
⁸ Slaughter and May. Financial regulation weekly bulletin – 18 December 2025. Link
⁹ HM Treasury. Final report of the Independent Review of the Payment and Electronic Money Institution Insolvency Regulations 2021 (PDF). Link
¹⁰ HM Government. National Payments Vision. Link
¹¹ Payment Systems Regulator. FCA and PSR respond to HM Treasury’s recommendations on payments regulation. Link
