The Financial Conduct Authority (FCA) introduced new rules on August 8 surrounding the protection of consumer money.
Set to be introduced in May 2026, the FCA will mandate payment firms in the UK to keep customer money separate from business money in light of any potential future collapses or insolvency.
Should a payment firm collapse, the rules will ensure consumer money can be securely returned.
The financial regulator has also removed audit requirements for smaller businesses if they hold less than $134,000 (£100,000) in customer funds.
In full, the new rules require UK payment companies to follow:
- 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.
Companies will be given a nine month grace period to prepare for the new rules. The FCA will also investigate any payment company that has previously faced insolvency issues in the past.
“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,” Matthew Long, Director of Payments and Digital Assets, FCA.
“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.”
Ensuring customer peace of mind
When a company collapses, the process of returning money to consumers can take anywhere from days to years, and it is rarely straight forward.
One of the most high-profile examples came in 2020, when Wirecard filed for insolvency after revelations of accounting fraud worth up to $1.9bn. The firm’s services underpinned accounts for consumers using Curve and Pockit, as well as around 70 other UK-based payment companies.
The FCA intervened and ultimately froze the accounts of Curve, Pockit and the affected firms to make sure consumer money was secure.
With the financial regulator’s new rules coming in May 2026, the FCA is looking to ensure a process is in effect to not only ensure customer money is protected, but to give them peace of mind.
