Regulator overhauls safeguarding rules for payment and e-money firms

Regulator overhauls safeguarding rules for payment and e-money firms

The Financial Conduct Authority (FCA) has announced new rules to provide greater protection for consumers using payment and e-money firms.

Set to take effect from May 2026, the changes will improve safeguarding practices to ensure customer funds are secure, even if a firm becomes insolvent.

Safeguarding means that customer money must be kept separate from the firm’s own money so that it is available to be returned if the firm fails.



Following constructive engagement with industry, the FCA has confirmed that the new rules will kick in after nine months, giving industry time to prepare. It has also made changes to ensure that rules are proportionate for smaller firms, such as by removing the requirement for audits if a firm holds less than £100,000 in customer funds.

These rules mean that consumers are better protected, and if a payment or e-money firm fails they are more likely to get a full refund and with fewer delays.

The new rules require:

  • Annual audits by qualified auditors.
  • Monthly reporting for payment firms.
  • Firms to conduct daily checks to make sure the right amount of money is being safeguarded to protect customers.
  • Better planning if firms fail so customers receive their money back sooner.

These rules will address issues the regulator has found in previous failures of payment firms. 

Payment firms that became insolvent between Q1 2018 and Q2 2023 had average shortfalls of 65% of their customers’ funds.

Matthew Long, director of payments and digital assets, FCA, said: “People rely on payment firms to help manage their financial lives. But too often, when those firms fail, their customers are left out of pocket.

“Most of those who responded to our consultation agreed we need to raise standards to protect people’s money and build trust, but any changes needed to be proportionate, especially for smaller firms.

“We’ll be watching closely to see if firms seize the opportunity and make effective improvements that their customers rightly deserve – this will help us to determine whether any further tightening of rules is necessary.”

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