An agentic payment is a payment made by an AI system acting with some autonomy for a consumer or business. The customer sets the objective, the permissions and the limits; the agent then chooses what to buy, from whom, when and how to pay, without a separate instruction for each payment.
Unlike a standing order or direct debit, the agent exercises judgement between alternatives. That is what makes the regulatory analysis different: the UK payments rules assume an identifiable customer gives each instruction to a regulated firm, and an agent sits between the two.
There is no separate FCA licence or rulebook for agentic payments, and the FCA has said it does not plan to introduce AI-specific rules, relying instead on its existing framework. Regulation follows the activity. Using AI in the customer journey does not take a firm outside the regulatory perimeter, and describing software as an agent does not make the payment activity unregulated.
If a business receives customer funds, operates payment accounts, initiates payments from accounts held elsewhere or executes payment transactions, it is likely to need FCA authorisation or registration under the Payment Services Regulations 2017 (the PSRs). If customers hold a stored balance, the Electronic Money Regulations 2011 apply. The agent itself is software and holds no licence; the business that provides the service is the one that may need permission.
Policy is moving. HM Treasury's consultation on modernising payment services regulation, which ran from 14 July to 6 October 2026, asks what changes are needed to authentication, consent and liability for unauthorised transactions when AI agents make payments. The FCA's 2026 Regulatory Priorities report for payments says it is working with the Treasury on whether rules are needed for agentic AI payments.
The answer depends on who contracts with the customer for the payment function, who can initiate transactions, whether the business touches customer money and which authorised firm executes the payment. The table gives the usual starting points.
| Business model | Likely position | Key test |
|---|---|---|
| Agent recommends; customer approves each payment at their own bank | Usually outside the PSRs | The business never initiates or executes the payment |
| Agent initiates payments from the customer's bank account through open banking | Payment initiation services (authorised payment institution, €50,000 capital) | The business initiates payments at the customer's request |
| Agent reads account data to make decisions | Account information services (RAISP registration) | The business accesses accounts held at other providers |
| Business receives customer funds and pays suppliers | Money remittance or execution (authorised payment institution) | Customer money passes through the business |
| Customers hold a balance the agent spends | Electronic money (EMI, €350,000 capital) | Stored value is issued |
| Technology supplied to a bank, PI or EMI that provides the service | Often outside direct regulation | The regulated partner contracts with the customer and controls the payment |
Firms providing payment initiation or account information services also need professional indemnity insurance or a comparable guarantee. Our guide to the UK payment institution licence covers capital, safeguarding and the application, and the UK EMI licence page covers stored-value models.
An AI procurement platform recommends purchases and sends the user to their bank app to approve each one: it is a software provider. The same platform, once authorised by the customer to pay suppliers automatically whenever stock falls below a threshold, using open banking to move money from the customer's account, is initiating payments. It needs payment initiation permission itself or must restructure so that an authorised provider contracts with the customer for that service.
Agentic payments connect most closely with payment initiation services and open banking. In a conventional journey the customer instructs each payment and authenticates it with their bank. An agent may instead act under a broader mandate, initiating later payments when conditions are met and the customer is not present.
Three questions are open under the current rules: whether a broad mandate is sufficient consent for each later payment, when authentication must take place, and how much discretion an agent can have before the character of the service changes. Variable recurring payments, where a customer authorises a series of future account-to-account payments within agreed limits, are the closest existing model. HM Treasury's consultation proposes a new access right for payment initiation providers to lodge variable recurring payment mandates with account providers, and the open banking statutory instrument under the Data (Use and Access) Act 2025 is due by the end of 2026.
Using an authorised provider underneath does not by itself place a fintech outside the perimeter. What matters is the role the fintech actually plays in the customer relationship and the payment.
The PSRs treat a payment as authorised only where the customer has given consent in the form and procedure agreed. An agent acts on parameters rather than individual instructions, so the firm needs to show that the consent the customer gave covers each payment the agent makes.
A customer authorises a travel agent to book a return flight to Madrid. A well-designed mandate records: the purpose (one return flight, London to Madrid); the dates (departing between 10 and 14 March); the maximum price (£400 including fees); the payment source (a named debit card or bank account); permitted sellers (airlines and named booking sites only); an approval trigger (any fare above £350 or any non-refundable fare goes to the customer first); and an expiry (the mandate lapses after one booking or on 1 March). Each payment the agent makes can then be checked against the mandate, which gives the firm the evidence of consent it needs and gives the customer a clear basis for any dispute.
An agent that stays within its mandate but acts in a way the customer could not reasonably anticipate can still create conduct and liability concerns. Mandates should be specific enough that the customer understands what they have authorised.
Strong customer authentication (two independent checks, such as a device and a fingerprint) was designed for journeys where the customer interacts directly with their provider. An agent may pay when the customer is not present. The current requirements still apply, and AI-initiated payments are not exempt. Treatment depends on the journey and on whether an existing exemption or out-of-scope category applies, such as payments to trusted beneficiaries, recurring payments of the same amount to the same payee, or payments initiated by a merchant under an agreed mandate.
The likely direction is authentication of the mandate itself, with controls that set which payments can then proceed without repeated customer intervention. The Government has committed to replacing the technical standards in the PSRs with outcomes-based FCA rules, which is the route through which agent-specific authentication could be introduced. Products should be designed so authentication logic can be changed without rebuilding the service.
Liability is the hardest open question. An agent might order ten times the quantity needed after misreading inventory data, select a fraudulent merchant, act outside its mandate, or be manipulated by malicious data planted on a website. Potentially responsible parties include the customer, the AI provider, the payment firm, the bank, the merchant and the model provider.
| Situation | PSRs position | Agentic question |
|---|---|---|
| Unauthorised payment | Refund by the end of the next business day (regulation 76); customer liability capped at £35 unless fraud or gross negligence (regulation 77) | Is a payment outside the agent's mandate unauthorised? |
| Payment where the exact amount was not agreed in advance | Refund right if the amount exceeded what the customer could reasonably expect, claimed within 8 weeks (regulations 79 and 80) | How does this apply to agents with price discretion? |
| Customer tricked into authorising a payment | Authorised push payment fraud reimbursement for Faster Payments, up to £85,000 | Is a manipulated agent's payment within the scheme? |
| Late notice by the customer | Unauthorised or incorrect payments notified within 13 months (regulation 74) | Does the firm's monitoring alert the customer in time? |
A payment can be validly mandated yet produce an outcome the customer never intended, which blurs the line the PSRs draw between authorised and unauthorised payments. Until the law is clarified, firms should set out responsibility in contracts with customers, AI providers and payment partners, and build dispute handling alongside the technology.
Payment firms and merchants increasingly need to know not only who the customer is but what is acting on the customer's behalf. "Know your agent" describes the controls that establish whether a payment came directly from the customer, from deterministic software the customer configured, or from an autonomous agent, and whether that agent holds genuine authority from the customer.
It is not a regulatory requirement today. It is likely to become part of payment infrastructure, through agent credentials, signed mandates and scheme rules, as agentic commerce grows. Identity and permission architecture may matter as much to a regulated firm as the AI model itself, because it is how the firm evidences consent and detects an agent that has been compromised.
Where retail customers are involved, the Consumer Duty applies to the whole service, including how authority is obtained and how it is exercised, not only to whether the AI performs accurately. Customers relying on an agent to make decisions they would otherwise make themselves need particular protection.
Outcome monitoring should include complaints about agent decisions, disputed payments, mandate changes and cancellations, so the firm can see where the agent is producing results customers did not expect.
Many early agentic products serve businesses rather than consumers: procurement agents, accounts payable automation and treasury agents. The Consumer Duty does not apply to these customers, and the PSRs allow a payment firm and a business customer that is not a consumer, micro-enterprise or charity to agree that some of the information and liability provisions do not apply, known as the corporate opt-out.
That gives more contractual flexibility over mandates, refunds and liability, but the core questions remain. The firm still needs a clear record of the authority the business granted, controls that keep the agent within it, and a dispute process. Treasury agents that move funds between a group's accounts, or sweep surplus cash, should be checked against the permissions analysis in the same way as consumer products, because moving money for a client remains a payment service whatever the size of the client.
Some agentic models hold funds before the agent spends them, for example a budget wallet the agent draws on. If the business receives customer funds for payment transactions, it is a safeguarding institution under the PSRs or EMRs and the FCA's CASS 15 rules apply: segregated safeguarding accounts, reconciliations at least once each reconciliation day, the monthly REP027 return within 15 business days and, above £100,000 safeguarded, an annual safeguarding audit. A stored balance the customer can redeem is likely to be e-money.
The Money Laundering Regulations 2017 apply to the regulated firm in the usual way: customer due diligence on the person or business that grants the mandate, sanctions screening of every counterparty the agent pays, and transaction monitoring. Monitoring should look at the agent's behaviour as well as the customer's, because an agent paying many new counterparties, or splitting payments, may indicate that it has been compromised or misused. Suspicious activity is reported through the money laundering reporting officer to the National Crime Agency.
Agents can apply controls more consistently than people, but they create new attack routes. Criminals may manipulate an agent through planted data, compromise its credentials, alter its instructions or set up fraudulent counterparties for agents to find. Because agents can transact without human review and at machine speed, losses can mount before conventional controls react. Slowing the growth of fraud, including authorised push payment fraud, is part of the FCA's 2026 integrity priority.
Agentic products depend on a chain of providers: model developers, cloud infrastructure, agent frameworks, payment application programming interfaces (APIs) and data sources. Outsourcing the model does not outsource accountability for the regulated service or for customer outcomes.
From 18 March 2027, under FCA PS26/2, authorised payment institutions and EMIs notify the FCA of material third-party arrangements and submit an annual register, which will include material AI and cloud dependencies. Our article on AI governance for financial services covers the wider control framework, and the firm's AI governance page describes its support.
Where an agent is part of how customers make payments, it is likely to be part of an important business service under the FCA's operational resilience rules (SYSC 15A), which apply to payment institutions and EMIs. The firm sets an impact tolerance for the service, maps the model, data and payment dependencies behind it and tests severe but plausible scenarios, such as the model provider becoming unavailable, an agent behaving erratically after an update or a payment API outage.
Two controls matter most. The first is a way to switch agent payments off instantly while leaving customers able to pay manually. The second is a defined process for reversing or resolving the payments an agent made while it was behaving incorrectly, with customer communication ready in advance.
An AI fintech can often work with a regulated bank, payment institution, EMI or open banking provider that performs the regulated activity, while the fintech supplies the technology and customer experience. That can be efficient, particularly where the fintech never controls customer funds.
The structure must match reality. The fintech should not present itself as the payment provider, control the regulated activity or initiate payments independently outside its technology role. Contracts, customer journeys and technical architecture should all describe the same division. If customers contract with the fintech for the payment service and the licensed provider is largely invisible, the analysis may differ from a simple software arrangement. Where the fintech becomes the agent of the regulated firm, the agent must be registered with the FCA before it acts.
The PSRs and existing FCA requirements apply today. There is no standalone agentic payments authorisation, no current know-your-agent requirement and no general exemption for AI agents from the rules on payment initiation, consent or authentication.
| Development | Status |
|---|---|
| HM Treasury consultation questions on agentic payments (authentication, consent, liability) | Consultation closed 6 October 2026; response awaited |
| FCA work with HM Treasury on whether rules are needed for agentic AI payments | Under way (2026 priorities) |
| FCA AI Live Testing and Supercharged Sandbox | Running; evaluation report due by end of 2026 |
| Outcomes-based FCA authentication rules replacing the technical standards | Government commitment; rules to follow |
| Open banking framework and variable recurring payments access right | Statutory instrument due by end of 2026 |
Products can be built under the current framework, but they should be designed to adapt as authentication, liability and agent identity rules develop. Our guide to the proposed UK payment services reforms covers the wider consultation.
The firm assesses agentic payment products from the customer journey up: perimeter analysis, whether direct FCA authorisation is needed, and how responsibility is divided with regulated infrastructure providers. It prepares authorised payment institution, payment initiation and EMI applications and variations of permission, reviews payment flows, consent and liability models, and supports FCA engagement. The analysis is most valuable before payment architecture and partnerships are fixed.
There is no separate licence. Existing rules apply by activity, so payment initiation, money remittance, payment accounts or e-money may need FCA permission even where an AI agent performs part of the service.
The agent is software and holds no licence. The business providing the service may need payment initiation permission, depending on who contracts with the customer, who initiates the payment and how the service connects to the customer's account.
Current authentication requirements apply and AI-initiated payments are not exempt. Treatment depends on the journey and on whether an existing exemption, such as trusted beneficiaries or recurring payments, applies.
The PSRs set refund and liability rules for unauthorised payments, but they were not written for agents with discretion. Until the law is clarified, firms should allocate responsibility in contracts and build a clear disputes process.
Often, if the regulated partner genuinely contracts with the customer and controls the payment. Licensed infrastructure does not place the fintech outside regulation if it independently performs a regulated activity.
No. It describes emerging controls to verify that a payment comes from an agent with genuine authority from the customer, and is likely to develop through industry standards and scheme rules.
HM Treasury's payment services consultation, which closed on 6 October 2026, asked what changes are needed to authentication, consent and liability. The FCA is considering with the Treasury whether rules are needed.
Buckingham Capital Consulting has obtained FCA payment institution licences, including open banking permissions for Oval, and e-money licences for firms such as Dzing Finance since 2013. It advises AI and fintech businesses on the permissions, consent and liability models agentic payment products need before launch.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.