2026 will be a defining year for the payments industry. After more than a decade of rapid innovation - from the rise of contactless to the growth of fintechs - the payment market is entering a new phase where regulation, resilience, and real-time infrastructure will set the tone.
Across the UK and Europe, several shifts are converging. The Financial Conduct Authority (FCA) is finalising its regime for Deferred Payment Credit (BNPL), embedding stricter credit checks and consumer protections. Variable Recurring Payments (VRPs) are scaling beyond “sweeping” into commercial use, while virtual cards are becoming the default for supplier and SaaS payments. At the same time, AI-driven fraud is evolving at an alarming pace, pushing enterprises to deploy smarter orchestration and risk analytics.
For the payment ecosystem, 2026 is not about new technology for its own sake - it’s about operationalising trust. The winners will be those who embed payments securely and compliantly, turning finance into a connected infrastructure that fuels business growth.
Let’s take a closer look at the predicted payment trends for 2026.
The UK remains one of the most advanced payments markets globally, but 2025 marked a turning point.
📌 Regulatory momentum: The FCA has confirmed that Deferred Payment Credit (the formal term for BNPL) will become regulated under consumer credit rules. This move will reshape the short-term lending market and alter merchant–fintech relationships.
📌 Open banking adoption: Open Banking Limited reported over 11 million active UK users in 2025, with payment initiation volumes more than doubling year on year. Commercial VRP pilots are underway, particularly in retail and SaaS billing.
📌 Digital-first commerce: According to UK Finance, contactless accounted for roughly two-thirds of in-store transactions, while cash usage fell below 10%. Mobile wallets continue to outpace plastic, with consumers embracing speed and biometric security.
📌 Corporate transformation: Virtual card issuance for business payments surged, particularly across accounts payable and procurement. Companies cite improved control, fraud reduction, and seamless reconciliation as key benefits.
📌 Fraud escalation: Industry reports showed record levels of account-takeover and remote purchase fraud, with criminals leveraging AI tools and deepfakes to bypass verification.
Together, these forces set the stage for a recalibrated ecosystem - one built on compliance, connectivity, and credibility.
2026 will be the year BNPL becomes a regulated credit product in the UK. The FCA’s Deferred Payment Credit rules will require providers to perform affordability and creditworthiness checks, apply clear disclosures, and offer standardised complaint handling.
This is a decisive shift. Non-compliant or lightly supervised BNPL providers will face a steep cost of adaptation. Larger, regulated lenders, including banks and established credit firms, will step into the space, offering structured instalment products aligned with consumer-credit standards.
For merchants, this means closer scrutiny of partners, revised commercial agreements, and potential adjustments to revenue-sharing models. Short-term, some may see friction as underwriting tightens; longer-term, consumer trust and responsible lending will strengthen the category.
In Europe, similar oversight is advancing. The EU’s Consumer Credit Directive II (CCD2) introduces harmonised protections for short-term credit across member states, setting the stage for a more consistent regulatory landscape.
BNPL’s evolution into a mature, credit-governed segment signals a broader trend: the integration of innovation into regulated frameworks. Payments in 2026 will not simply be faster - they will be safer, audited, and accountable.
In 2026, embedded finance will move from experimentation to infrastructure. Enterprises and SaaS platforms are no longer asking if they should embed payments, cards, or accounts — but how to do it securely and at scale.
"Historically, it has always been very difficult to be involved with financial services without being backed or going through a bank. So already, the BaaS model is reducing/removing the barriers to entry to having the 'right to play', but whilst still upholding strict compliance and security standards. This has been a perfect recipe for technology innovators to identify very specific pain points across industries, demographics, and beyond.
As a whole, the UK government itself is pushing for digitalisation across various sectors, and we are already seeing non-regulated players, experts in their own fields, wanting to now enter the fintech space and bringing financial services in house. This reflects the expansion of a systemically critical industry, also creating a pivotal shift for companies to generate new revenue streams and keeping up with end client expectations."
Mohan Madouri
Sales Director
Edenred Payment Solutions
The Banking-as-a-Service (BaaS) sector, once dominated by speed and flexibility, is evolving toward compliance, reliability, and transparency. Regulators are increasing oversight on outsourcing, safeguarding, and third-party risk management. Banks and licensed BaaS providers must demonstrate operational resilience, while fintech partners face higher expectations on governance and data protection.
Mohan Madouri
Sales Director
Edenred Payment Solutions
For corporates, the differentiator will be the quality of infrastructure: composable, API-first stacks backed by regulated rails. Providers that can blend agility with strong compliance will emerge as preferred partners for enterprise clients seeking to build their own financial ecosystems.
Across Europe, this maturation is visible too. PSD3 and the new Payment Services Regulation (PSR) are reinforcing consumer protection, strengthening API standards, and aligning data access frameworks. Together, these developments push embedded finance toward a new equilibrium defined by trust and resilience rather than speed alone.
Open banking payments are on the brink of mainstream adoption. In 2026, Variable Recurring Payments (VRPs) and account-to-account (A2A) solutions will expand from “sweeping” use cases (moving money between a user’s own accounts) to commercial transactions in retail, utilities, and SaaS billing.
VRPs also help businesses realise revenue faster as they are processed using the Faster Payments rail which is available 24/7/365, compared to legacy systems which take longer."
Vrush Sumanoharan
Product Marketing Manager
Edenred Payment Solutions
This shift is driven by the combined forces of regulation, infrastructure, and merchant demand. The Open Banking Implementation Entity (OBIE) continues to refine API standards, while Pay.UK’s New Payments Architecture (NPA) lays the foundation for unified, real-time clearing.
For SaaS platforms, the opportunity is compelling: lower transaction costs, instant settlement, and reduced chargeback exposure compared to card payments. Early adopters in subscription billing are already exploring commercial VRP (cVRP) pilots with UK banks.
As adoption grows, A2A payments will begin to compete directly with cards in high-frequency, high-value segments. Card networks, in response, are enhancing their propositions - from loyalty integrations to tokenised authorisation guarantees.
For corporates, the real advantage lies in data. Direct-from-account payments allow for instant reconciliation and real-time visibility of cash positions - a foundation for better liquidity management and forecasting.
This helps streamline payment processes, saving time and reducing manual errors for businesses."
Vrush Sumanoharan
Product Marketing Manager
Edenred Payment Solutions
Virtual cards are rapidly becoming standard for supplier payments, digital advertising, and SaaS procurement.
This transformation is driven by a perfect storm of priorities: the need for better fraud control, streamlined reconciliation, and automated spend management. Finance teams are moving away from shared physical cards or manual bank transfers toward single-use or controlled-limit virtual cards issued instantly.
The ability to set specific spend parameters (MCC filtering) will propel the adoption of virtual cards in new and innovative use cases such as insurance and assistance payouts."
Vrush Sumanoharan
Product Marketing Manager
Edenred Payment Solutions
Procurement and AP automation vendors are embedding card issuance directly into their workflows. The result is real-time control of budgets, granular visibility into spend categories, and seamless integration with accounting software.
"When implementing virtual cards within payment processes, one of the most crucial factors for success is continuity.
The virtual card is simply a tool that enables a transfer of funds, this should slot into existing processes seamlessly without disrupting reporting, operations and back-office activities."
Vrush Sumanoharan
Product Marketing Manager
Edenred Payment Solutions
In 2026, expect this model to become the default for enterprise payments, particularly as corporates prioritise tokenisation, automation, and security across every spend channel.
Alongside more established trends in open banking and virtual cards, two emerging technologies are beginning to surface in enterprise conversations: stablecoins in B2B payments and the rise of Agentic AI in user journeys.
Stablecoins are increasingly viewed as a way to streamline corporate payment flows, offering faster settlement, improved liquidity management and more constituent value handling – but only where compliance, safeguarding and security frameworks are sufficiently robust.
"Stablecoins are starting to gain attention in the B2B world because of the efficiency they can bring to the corporate payment flows. They offer the potential for faster settlement, improved liquidity management and more predictable value exchange, but only if compliance and security are embedded from the start.
For large enterprises, the real question isn’t whether stablecoins are innovative, but whether the ecosystem around them is mature enough to be safely integrated into existing payment processes."
Karine Martinez
Head of Sales
Edenred Payment Solutions
In parallel, organisations are exploring how Agentic AI and Conversational AI could converge to create ultra-frictionless, even “no-click” payment experiences. These innovations are promising, but they also raise important questions about accountability, transparency and how payment providers evolve their compliance architecture to support new forms or automation.
"Agentic AI combined with Conversational AI opens the door to genuinely frictionless, “no click” payment experiences. But the more autonomous these journeys become, the more important it is to build compliance and security into every step.
As AI takes on more of the interactions, payment providers will need to rethink how they monitor, validate and safeguard these processes to ensure trust and transparency."
Karine Martinez
Head of Sales
Edenred Payment Solutions
As payment volumes rise, so too does the sophistication of fraud. 2025 saw a record increase in scams and identity attacks, and 2026 will test the industry’s resilience.
Criminals are using AI-generated deepfakes, cloned voices, and real-time phishing scripts to impersonate both consumers and executives. Account-takeover and remote purchase fraud continue to be the highest-risk categories in the UK, according to UK Finance.
In response, financial institutions and payment solutions providers are investing heavily in fraud orchestration - combining device fingerprinting, behavioural analytics, and risk scoring in real time. Machine learning models trained on diverse transaction data are becoming standard.
The challenge for enterprises will be balancing security with user experience. Too much friction risks customer abandonment; too little invites exploitation. The emerging consensus is layered protection - intelligent friction that adapts to context and risk.
2026 could mark the start of a collaborative defence ecosystem, where banks, PSPs, and merchants coordinate against shared threats.
The retail payment environment is evolving rapidly. Contactless and mobile wallets now dominate in-store transactions, and the next frontier will be competition among wallet providers for user engagement and loyalty.
Apple Pay and Google Pay lead the pack, but banks are re-entering the fray with their own digital wallets and the Pay by Bank App initiative. This diversification is driving innovation in tokenised loyalty - the use of digital tokens to store and redeem offers, rewards, or balances securely within wallets.
"I am a massive gift card advocate – there’re so many brands that are not utilising their gift cards to their full potential, and there’re hundreds of opportunities out there! Gift cards are loyalty and engagement tools by their very nature.
The opportunity lies in ensuring that the product has internal sponsorship, is recognised and accounted for properly, is visible within retail and brand organisations, and that it is sold in all available channels."
Alec Donald
Retail Vertical Lead
Edenred Payment Solutions
The “tokenised retail economy” is taking shape: every value exchange - payment, points, identity - is represented by secure, interoperable tokens rather than static cards. For retailers, this means unified, frictionless experiences that link spend with personalised offers and reduce fraud.
"There has been a continued shift towards digital gift cards in 2025. Part of this lies in immediate delivery, but also security.
Having a digital touch point with a customer, and capturing purchaser and recipient information, allows retailers insights into gift card spending behaviour like never before, especially helpful to drive lapsed customers to re-engage with the brand."
Alec Donald
Retail Vertical Lead
Edenred Payment Solutions
Contactless limits and authentication methods will also evolve, with regulators and networks allowing more flexible, biometric-driven thresholds.
In 2026, retail success will depend on experience orchestration - how seamlessly a brand can integrate payments, loyalty, and identity into one frictionless journey.
"I recently heard a statement that retail is always in beta. Innovating and prepping for what’s to come. You can see the reduction in cash usage every day. It’s harder and harder to access high street banking, ATMs are costly to operate and can be compromised. Retailers need to adapt and future proof as much as possible.
The latest POS can be very costly to implement and very quickly outdated. The key aspect is to give customers options and flexibility and easy access to different payment types."
Alec Donald
Retail Vertical Lead
Edenred Payment Solutions
Environmental, social, and governance (ESG) considerations are fully extending into payments. As financial services come under increasing pressure to demonstrate social and environmental accountability, “payments sustainability” is becoming part of corporate reporting.
Clients and regulators alike are demanding transparency: the carbon footprint of transactions, the inclusivity of underwriting decisions, and the ethics of data use.
For embedded finance and BaaS providers, this means developing the ability to surface ESG metrics in payments reporting - from transaction energy intensity to social impact indicators.
Responsible lending, fair treatment of consumers, and data governance are becoming competitive differentiators.
In a market where trust is everything, the ability to evidence responsibility will carry weight with enterprise clients and regulators alike.
Across the UK, and EU, the payments market is entering a new chapter. Innovation is no longer the challenge; trust and integration are.
In 2026, regulation will formalise BNPL, open banking will reshape rails, and AI will redefine both fraud and defence. Payments will no longer sit at the periphery of business models - they’ll be embedded, governed, and value-generating at the core.
For enterprises and fintechs alike, the focus must shift from speed to sustainability, compliance, and user experience. Payments are becoming infrastructure - and infrastructure demands trust.
If you are planning to scale, optimise, or innovate your embedded finance offering in 2026, get in touch with our experts to find out how we can help you.