The Financial Conduct Authority (FCA) in the UK aims to introduce new rules to protect consumers when they use payment firms and improve the overall safeguarding practices. Starting of May 2026, consumer money must be kept separate from the firm’s own money so that it can be available to be returned at any time in case the firm fails.
More about FCA’s new rules
After constructive debates with the industry, the FCA mentioned its new rules will start being imposed as of May 2026, allowing companies around nine months to prepare. The new rules are adjusted according to a company’s size, so that smaller firms with less than GBP 100,000 in customer funds will not be required for audits.
The changes made to the current regulation also mean that consumers receive better protection and if a payment or an electronic money transfer provider fail, customers have higher chances to receive a full refund with fewer delays.
What does it mean
The FCA will require annual audits by qualified auditors, monthly reporting for payment firms, and better planning if companies fail so that customers can receive their money back faster. Moreover, companies must conduct daily checks to ensure that the right amount of money is safeguarded to protect customers.
The new set of rules imposed by the regulator aims to address previous issues that were find in the industry when payment firms failed and customers were left with financial distress. In fact, firms that became insolvent between Q1 2018 and Q3 2023 were short up to 65% of their customers’ funds.
According to the companies’ adaptability and response to raise the standards to better protect people’s money, the FCA might come up with a new set of tighter rules in the future.
