Consumers of the United Kingdom will be better protected when using payment companies, with the introduction of new rules to protect their money from May 2026.
The changes, described today by the Financial Behavior Authority (FCA), will improve preservation practices between payment companies.
Ensure means that customer money must be kept separate from the business money so that it is available to refund if the business fails.
Following the constructive commitment with the industry, the FCA confirmed that the new rules would come into force after nine months, giving the industry time to prepare. It has also made changes to ensure that the rules are commensurate for smaller businesses, such as abolishing the requirement for checks if a business holds less than £ 100,000 in customer capital.
These rules mean that consumers are better protected and if the payment or online business fails, they are more likely to receive full refund and with fewer delays.
The new rules require:
- Annual checks by specialized auditors.
- Monthly report for payment companies.
- Businesses carry out daily checks to make sure that the correct amount of money is protected for customer protection.
- Better planning if businesses fail so customers get their money back earlier.
These rules will concern issues that the Regulatory Authority has found in previous failures of the payment companies. Payment companies that became insolvent between Q1 2018 and Q2 2023 had average shortages of 65% of their customers’ funds.
Matthew Long, Director of Payments and Digital Assets, FCA, said:
“People are based on payment companies to help manage their financial life. But very often, when businesses fail, their customers are left out of their pocket.
Most of those who responded to our consultation agreed that we need to increase standards to protect people’s money and build trust, but the changes had to be proportional, especially for smaller businesses.
We will carefully monitor to see if businesses take the opportunity and make effective improvements that their customers are right – this will help us determine if the rules are needed further. “