When you might be offering a regulated payment service
In general, the Payment Services Regulations 2017 (PSRs 2017) require that anyone who provides payment services as a regular occupation or business activity needs to be authorised or registered by us.
However, certain activities are excluded and certain bodies are exempt or otherwise entitled to provide payment services:
- exclusions are listed in schedule 1, part 2 of the PSRs 2017 – we explain one of these below (the commercial agent exclusion)
- exempt bodies are listed in regulation 3
- regulation 138 lists all bodies that are entitled to provide payment services, some of which do not need our authorisation or registration e.g. credit institutions, the Bank of England and the Post Office Ltd)
A list of 'payment services' can be found in schedule 1, part 1 of the PSRs 2017. Examples of regulated payment services include the transfer of money between two parties (money remittance) and services enabling cash to be placed on, or withdrawn from, a payment account and operating a payment account for customers.
Chapter 15 of our perimeter guidance manual (PERG 15) provides detail on when a business might require our authorisation or registration (see question 9, the heading 'Exemptions and exclusions', and PERG 15.5). Our web pages and Approach Document provide more information to help firms understand whether they need to be authorised or registered by us.
What you should you do if you think you might be offering a regulated payment service
You should apply to us for authorisation or registration, as required.
If you are in doubt, you should seek independent legal or compliance advice on whether or not your services are likely to constitute regulated payment services under the PSRs 2017.
The commercial agent exclusion
There are exclusions from the scope of the PSRs 2017.
For example, certain payment transactions through a commercial agent do not constitute regulated payment services.
The PSRs 2017 make clear that, under this exemption, the regulations do not apply in the following circumstances:
- where payment transactions are made through a commercial agent
- if the commercial agent is authorised (through a formal agreement) to negotiate or conclude the sale or purchase of goods or services, and
- the agent does so on behalf of either the payer or the payee, but not both parties
If a business acts on behalf of both the payer and payee then it is likely to require our authorisation or registration.
Acting on behalf of one party only
It is likely that a business will be acting for both the payer and the payee if payments are transferred into an account that it controls or manages before being sent to the payee, but the payer’s debt is only settled once the payee has received payment.
The authority to 'conclude' the sale or purchase of goods or services
A business is likely to have the authority to conclude the sale or purchase of goods or services on behalf of the payer or the payee, only if it has the authority to bind the payer or payee to a purchase or sale of goods or services.
Businesses should review PERG 15, especially questions 33A and 34A for more information.