Payment system supervisory fees set to rise under £1.7 million cap
Supervisory fees for UK payment systems and specified service providers are set to increase under new proposals published for the 2026/27 fee year. The consultation incorporates HM Treasury's plan to raise the statutory fee cap to £1.7 million, with responses due by October 22, 2026.
From £760,000 to £1.03 million
Under the proposed regime, Category 1 payment systems face an annual supervisory fee of £1.03 million if HM Treasury raises the statutory fee cap from £760,000 to £1.7 million.
Without the cap increase, Category 1 fees remain capped at £760,000. Category 2 institutions would pay £0.59 million under the higher cap or £0.44 million under the current cap, while Category 3 systems face fees of £0.20 million and £0.15 million respectively.
Fee ratios across the three tiers are set at 1.75 to 1.00 to 0.33. Hourly rates for special project fees will also increase, rising to £160 for associates, £230 for technical specialists, £310 for managers, and £430 for other staff, while administrator rates stay at £70.
Catching up with operational reality
The Bank noted that the statutory fee cap has remained unchanged since 2018, while supervisory costs have outpaced it due to inflation and heightened operational resilience oversight.
The revised framework will also encompass future Digital Settlement Asset service providers once designated under the Financial Services and Markets Act 2023.
Supervisory costs for payment systems are recovered entirely from the industry, with the Financial Market Infrastructure levy budgeted at £18 million for 2026/27.
Long overdue price correction
Raising the cap simply acknowledges cost inflation after an eight-year freeze.
More notable is the tiered model, which shields smaller innovators from bearing excessive overheads.
While payments firms face higher bills, the revised distribution is far more defensible.