Agentic payments under UK law: consent works, authentication does not

AI agents are starting to pay for things. Some recommend a payment and wait for the payer to confirm it. Others are given a budget or a set of rules and left to choose the payee, the amount or the timing themselves. The question for payment service providers, and for the firms building these agents, is whether the Payment Services Regulations 2017 (PSR 2017) can cope.

On 14 July 2026, HM Treasury published its consultation Modernising Payment Services Regulation. Question 15 asked how existing payment services regulation needs to adapt to support agentic payments, and whether the rules on authentication, consent and liability for unauthorised payment transactions need updating. The consultation closed on 6 October 2026 and HM Treasury is now analysing responses.

Solvere Solicitors responded to Question 15. This article sets out our analysis.

The short answer

The consent and liability rules in Part 7 of the PSR 2017 largely work for agentic payments. Authentication does not. Short amendments to regs 2, 67 and 100 would close the gap.

By an agentic payment we mean a payment initiated by software that may choose the payee, the amount or the timing. It helps to keep three cases separate:

1. the payer confirms each payment the agent recommends;
2. the payer gives a mandate, for one payment or several, and the agent executes inside it; and
3. the agent executes outside, or at the edge of, the mandate.

The first case raises no new issue. The second and third are where the law needs attention.

Consent: a mandate can do the work

Under reg 67, a payment is authorised only if the payer consented to it, or to a series of which it forms part, in the form and procedure agreed with its provider. A mandate can be that consent, for one payment or a series, without fixing the payee or the amount. The mandate’s limits decide which payments it authorises.

A payment outside those limits needs the payer’s approval before the order is placed. Timing matters because reg 83 makes a payment order irrevocable once the payer’s provider receives it or, where a payment initiation service provider is used, once the payer gives consent to initiate.

So an agent that places an order without approval cannot cure it afterwards. The order is irrevocable but unauthorised.

Authentication: where the regime breaks

Regulation 100 requires strong customer authentication (SCA) when the payer initiates an electronic payment. For a remote payment, it also requires dynamic linking to a specific amount and a specific payee. The detail is in the FCA’s Technical Standards on Strong Customer Authentication and Common and Secure Methods of Communication (SCA-RTS), made under reg 106A.

That works when the payer knows the payee and the amount at the point of authentication. It does not work when an agent chooses the payee later. No provision of the SCA-RTS, including articles 5(3), 13 and 14, reaches a payee chosen after the payer has authenticated.

The FCA cannot fix this on its own

Regulation 100(5) allows exemptions in technical standards, but reg 106A(3) confines them to three grounds: risk, amount or recurrence, and channel. An agentic mandate fits none of these easily. Nor can technical standards replace reg 100(2)’s specific amount and specific payee with mandate limits. That needs a change to the regulations.

What would be enough

For a mandate with limits, SCA should apply when the mandate is created or amended, and to any approval of a payment outside it. That means two independent elements from different categories, such as a face scan or passcode on a device bound to the payer’s account.

When the payer authenticates the mandate, they should be shown the limits they are approving. Any change to those limits should need fresh authentication.

The authentication elements must stay with the payer. An agent able to complete authentication itself defeats payer supervision.

The method of authentication and the record to be kept are matters for the FCA. If HM Treasury replaces the current FCA powers, as paragraph 2.8 of the consultation contemplates, the new power should extend to this.

Liability: the existing rules mostly hold

Permitted use of an agent is not an intentional or grossly negligent breach of the payer’s obligations under reg 72.

If the payer denies authorising a payment, reg 75 puts the burden of proving authentication on the provider. To meet it, the provider needs a record of the authenticated mandate and of the instruction the agent executed.

Under reg 77, an agent exceeding its mandate is not naturally a lost, stolen or misappropriated payment instrument. Regulation 77(4)(c) adds that where reg 100 requires SCA and the payer’s provider does not require it, the payer is not liable for any losses unless they acted fraudulently.

The gap is in reg 95. It lets a provider recover from another provider or an “intermediary” to which its liability is attributable. “Intermediary” is undefined, and it should be defined. A payment outside the mandate is unauthorised. The payer’s provider should refund under reg 76 first, then recover under reg 95 from the agent’s operator to the extent the loss is attributable to it.

Three amendments we proposed

We put forward three example amendments for HM Treasury to consider.

Regulation 67 (consent). After paragraph (2) insert:

“(2A) Consent to the execution of a payment transaction, or of a series of payment transactions, may be given by a mandate under which the payee, the amount or the time of execution is determined after consent is given, if the mandate states the limits within which each may be determined.

(2B) A payment transaction initiated under a mandate referred to in paragraph (2A) is authorised by that mandate only if it falls within those limits. Despite paragraph (2)(a), consent to a payment transaction outside those limits must precede receipt of the payment order.”

Regulation 100 (authentication). After paragraph (2) insert:

“(2A) Paragraph (2) is met for a payment transaction initiated under a mandate referred to in regulation 67(2A)-(2B) if the strong customer authentication applied when the mandate was given or last amended dynamically linked it to the limits stated in the mandate.”

Regulation 2(1) (definitions). Insert:

““intermediary”, in regulation 95, includes a person, other than a payment service provider, who provides to the payer, or operates for the payer, software that, under or in excess of a mandate referred to in regulation 67(2A)-(2B), determines the payee, amount or time of execution of a payment transaction;”

We will update this article when HM Treasury publishes its response.

Solvere Solicitors advises payment institutions, e-money issuers and technology firms on payments regulation, including agentic payments. For a preliminary view on how these rules apply to your product, contact Blake O’Donnell at blake.odonnell@solveresolicitors.com.

This article is general information on the law as it stood on the date of publication. It is not legal advice on your circumstances.