Modulr, which provides the payments infrastructure for businesses, including fintechs like Sage and Liberis, confirmed that it’s currently working with the regulator on its systems and processes. At the beginning of October 2023, FCA issued a restriction for the company, preventing it from bringing new partner clients, such as agents and distributors who use its payments infrastructure for cards or accounts.
According to Modulr’s statement for Sifted, the company agreed to temporarily pause onboarding certain new customer segments in the UK, due to the many new and revised UK regulations coming into force in 2023 and 2024. These include regulatory changes such as the new UK consumer duty, adjustments to push payment fraud reimbursement, and a ban on incentive marketing for high-risk assets like crypto. Modulr began to notify its new partners that they may not be able to onboard until the first quarter of 2024, however, the firm declined to comment on the deadline. According to officials, Modulr agreed with the FCA to pause the onboarding of new Agent & Distributor (A&D) partners, as they bring particular risks to oversee and manage, to ensure its governance, systems, and controls support the business’ scale and regulatory requirements. The company also confirmed that it aims to future proof in terms of regulation changes, including the Consumer Duty, APP Fraud Reimbursement, and Financial Promotions Requirements. Modulr also confirmed that this move has no impact on existing partners, the onboarding of new direct customers, or the expansion of its European business.
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