EU and UK: Five payments themes to look out for in 2024

The payments industry faces yet more change in 2024.  From DORA and MiCA preparations in the EU to a smarter regulatory framework and stablecoin legislation in the UK, payments firms must respond to an ever-changing regulatory landscape. In this update we round up a series of articles looking at the payments regulation outlook in the EU and UK.

01| Breaking down the DORA: Why payments firms need to prioritise operational resilience

2024 is set to be a crucial year for EU payments firms as they prepare for the Digital Operational Resilience Act which comes into effect in less than a year. Fortunately, several aspects of DORA share similarities with existing rules in payment services regulation. However, the journey to DORA’s full compliance is not without its challenges. Payments firms will have to produce new, extensive internal documentation about how they manage ICT risks and amend their contractual arrangements for ICT services.

02| Better safe than sorry: Payments firms face changes to safeguarding rules

The UK government aims to establish a smarter regulatory framework for financial services. As part of this process EU-derived payments legislation will be repealed and more rule-making authority handed over to the regulators. The FCA aims to use these powers to tighten the safeguarding regime and loosen the requirements for strong customer authentication.

03| Fighting back: A milestone year for tackling payment fraud tackling payment fraud

Tackling payment fraud continues to be a priority for the FCA. Last year the FCA shared its review of anti-fraud controls at payment service providers. This year firms are expected to act on those findings to inform what more they can do to detect, manage and reduce fraud. Payments play an important role in the government’s Fraud Strategy which aims to achieve a 10% cut in fraud by the end of this year.

04| Coin money: Fitting stablecoins into regulation

In the UK, 2024 will be the year when a stablecoin legislation is brought forward. Regulators have already sought feedback on how they should oversee stablecoin-related activities. This year they plan to move the debate forward providing more detail via consultations which are planned for the second half of 2024. Meanwhile, firms are already preparing for the EU’s Markets in Crypto-Assets regulation which starts to apply from June 2024.

05| All systems go: A significant year for payment systems

Questions remain about what the future holds for important initiatives in payments such as Open Banking and the New Payments Architecture. The UK government plans to release a National Payments Vision to indicate the way forward on these and similar projects. In terms of regulation, the government seeks to extend the Bank of England's authority to supervise a wider array of payment intermediaries.

Read the Fintech and Payments section of our Financial Regulation Legal Outlook 2024 for more.