The UK regulator confirmed it is investigating agreements linked to the funding and use of PayPal’s digital wallet under the Competition Act 1998.
The Financial Conduct Authority (FCA) has confirmed it is investigating PayPal, Visa and Mastercard over suspected anti-competitive conduct linked to the funding and use of PayPal’s digital wallet.
The regulator stated it is investigating all three companies under Chapter I of the Competition Act 1998, while Visa and Mastercard are also being investigated under Chapter II of the Act.
According to the FCA, the investigation relates to “suspected anti-competitive conduct linked to the funding and usage of PayPal’s digital wallet”.
The regulator added that it “has reached no conclusions nor made any findings with regard to competition law having been broken”.
The acknowledgement followed disclosures made by PayPal in its latest filing with the US Securities and Exchange Commission (SEC), where the company revealed it had received notices of investigation and requests for information from the FCA in March 2026.
In the filing, PayPal stated the investigation concerns “certain provisions in PayPal’s contractual agreements with Visa and Mastercard relating to funding and use of the PayPal digital wallet”.
The company added that it is cooperating with the FCA.
Digital wallets move further into competition scrutiny
While the FCA has not disclosed specific contractual terms under review, the investigation places greater attention on how digital wallets interact with the card networks underpinning much of online consumer spending.
PayPal’s wallet is commonly funded through debit and credit cards issued on the Visa and Mastercard networks. Agreements governing how those cards are used within digital wallets can shape transaction routing, merchant acceptance and the broader economics of digital payments.
Competition regulators globally have increasingly examined the role of digital wallets and payment ecosystems in recent years, particularly as wallets have become a larger part of ecommerce and mobile payments activity.
Authorities in both Europe and the US have previously scrutinised payment infrastructure providers, app store operators and wallet providers over concerns linked to market access, payment choice and restrictions on competing services.
The FCA’s investigation also arrives as UK regulators continue to push for greater competition across payments infrastructure, including through Open Banking and account-to-account payment initiatives.
FCA outlines Competition Act powers
In its statement, the FCA noted that Chapter I of the Competition Act 1998 prohibits agreements or practices that could prevent, restrict or distort competition within the UK. Chapter II prohibits conduct that may amount to an abuse of a dominant market position.
The regulator also stressed that Competition Act investigations follow separate procedures from broader Financial Services and Markets Act enforcement processes.
According to the FCA, the investigation remains at an evidence-gathering stage and may not necessarily result in formal findings or objections.
The regulator stated it could later issue a statement of objections setting out a provisional view if it believes competition law may have been infringed, though it added that “not all cases result” in that stage being reached.
