2026 Outlook: The Next Phase of Payments, Fintech and Digital Assets

Payments and fintech are entering 2026 with a different mood. After years of rapid growth, regulatory shake-ups, and market correction, the focus has shifted from novelty to integration, maturity, and trust.  The industry is consolidating around technologies and models that enhance reliability, security and customer outcomes. In the UK, this evolution is being shaped by a mix of regulatory pragmatism, technological advancements and changing consumer expectations. Those who can combine commercial performance with regulatory confidence will define the next phase of the sector.  

Several themes stand out as defining the year ahead. 

AI Meets Digital ID: Cutting Friction, Boosting Speed 

Artificial intelligence is becoming a core component of payments and fintech infrastructure, particularly when combined with advances in digital identity and verification. In 2026, UK firms are expected to deploy AI less as a standalone innovation and more as an enabler of: 

• Risk-based customer onboarding and authentication 

• More effective fraud detection and prevention 

• Ongoing monitoring aligned to customer behaviour and transaction patterns

  
  

When implemented responsibly, AI supports regulatory objectives as much as commercial ones. It allows firms to reduce friction for low-risk customers while strengthening controls where risks are higher, aligning closely with UK expectations around Consumer Duty, financial crime prevention and operational resilience. 

Key Action Points 

• Mapping all AI touchpoints – Think onboarding, authentication, fraud detection, and ongoing monitoring 

• Adopting risk-based approaches – Can you explain AI-driven decisions to customers and regulators? 

• Align with regulatory expectations – Are low-risk customers experiencing friction-free onboarding while higher-risk profiles are appropriately challenged? 

• Monitor and iterate – Are AI models updated regularly with transaction and behavioural data to remain effective? 

Embedded Finance: From Convenience to Confidence 

Embedded finance is moving from convenience to confidence. For UK e-commerce and platform-based businesses, payments, lending and insurance are increasingly integrated directly into customer journeys in a way that is seamless. In 2026, success depends less on speed to market and more on: 

• Clarity of customer disclosures 

• Consistency of pricing and terms 

• Robustness of underlying payment and risk infrastructure 

  
  

Trust, not novelty, is now the primary differentiator in digital commerce today. 

Key Action Points 

• Audit all touchpoints – Are disclosures, fees, and terms clear and accessible to all customers? 

• Standardise pricing and contracts – Can customers compare offerings easily? 

• Embed risk oversight – Are monitoring, reporting, and anomaly detection processes in place? 

• Iterate based on feedback – Do customer complaints or friction points inform continuous improvement? 

  
  

BNPL Matures: Why Subscription Models are Winning

Buy Now, Pay Later is evolving towards subscription-based and merchant-focused models that: 

• Deliver more predictable costs and revenues for merchants 

• Improve cash flow management 

• Reduce reliance on penalty fees and consumer arrears 

  
  

Conduct expectations around affordability, transparency, and fair customer outcomes

are shaping the UK market.

The focus is moving from short-term

conversion to sustainable,

long-term relationships. 

Key Action Points 

• Shift to subscription or merchant led models - Can merchants forecast cash flow without surprises from late fees? 

• Embed affordability checks - Can customers clearly understand repayment obligations? 

• Focus on long term relationships - Are repeat customers treated fairly rather than optimised for short-term conversion? 

• Clarify disclosures – Could customers understand fees without a calculator? 

• Integrate operational infrastructure – Can systems handle spikes in repayments or anomalies without errors? 

Hands-Free Payments: What Happens When the Checkout Disappears? 

Payments are becoming more automated and embedded into everyday activities. In 2026, growth in hands-free and ambient payments is expected across sectors such as mobility, transport and smart infrastructure. Whilst automation reduces friction for customers, it also increases operational, fraud, and compliance risks. 

Examples include: 

• Vehicles automatically paying for fuel, charging, parking or tolls 

• In-app and IoT-enabled point-of-sale experiences 

• Payments triggered by authenticated presence or usage rather than manual input 

  
  

While these models raise important considerations around consent, authentication and liability, they also represent a natural progression towards more seamless and efficient commerce. 

Key Action Points 

• Map automated payment touchpoints –Could a transaction be misrouted or duplicated without detection? 

• Strengthen authentication and fraud controls –Are AI/biometric checks robust enough for unattended payments? 

• Monitor customer outcomes – Could a customer reasonably understand charges or reversals? 

• Stress-test systems under load –Can your systems reconcile hundreds of wearable or IoT payments simultaneously? 

• Integrate operational and regulatory oversight – Are all automated payments fully traceable and auditable? 

  
  

Stablecoins: Emerging as Payment Infrastructure

Stablecoins are moving from speculation to practical application. In the UK and globally, 2026 may mark a further shift in how stablecoins are used, particularly for: 

• Cross-border payments and settlement 

• Treasury and liquidity management 

• Programmable payment and reconciliation use cases

   

Stablecoins are moving closer to being recognised as part of the broader payments infrastructure, rather than a separate crypto-native experiment. 

Key Action Points 

• Assess high-value use cases - Where do stablecoins add operational efficiency? 

• Integrate with core systems - Can treasury, reconciliation, and payments systems handle stablecoin flows seamlessly? 

• Implement operational controls - Are volatility, counterparty, and transactional risks mitigated? 

• Maintain transparency and auditability – Are all stablecoin transactions traceable and documented? 

• Pilot before scale – Are initial deployments controlled and tested? 

  
  

Regulatory Landscape: What Should Firms Do Now? 

The regulatory environment remains demanding, but it is also becoming more coherent. The question isn’t whether these trends will affect your business, it’s whether you’re ready: 

Start with foundations: 

• Audit embedded finance partnerships – Do third parties meet your transparency and resilience standards? 

• Review AI governance – Can you demonstrate fair, explainable, and proportionate  

• Test stablecoin readiness – Are regulatory obligations clear for cross-border or treasury use? 

  
  

Position for the long term: 

• Design resilience into infrastructure – Operational resilience and cyber preparedness are board-level priorities. 

• Build trust into every touchpoint – Disclosures, pricing, and authentication should be clear, fair, and proportionate. 

• Stay internationally aware – Track PSD3, EU, and global developments to anticipate regulatory changes. 

Need a Head Start?

Adempi helps regulated firms navigate regulatory evolution with targeted health checks, strategic guidance, and practical implementation support. Whether preparing for PSD3, strengthening AI governance, or building resilient infrastructure, we can help. 

Get in touch and we will happily talk it through.

You can reach us at contact@adempi.co.uk or on 0203 925 4761 

Or to prepare your business for whats next or find out more about our services from the website: Adempi - FCA Compliance Consultants.