The PARs aim to improve the transparency and comparability of fee information about payment accounts (including current accounts), help people switch payment accounts, and make sure every UK resident has access to a basic bank account.
The PARs aim to improve:
- transparency and comparability of fee information about payment accounts to make consumers more aware of the fees and charges applied by account providers (it will also make it easier to compare account offerings, which may lead to more competition and better deals for consumers)
- switching of payment accounts by establishing minimum standards, to make switching more attractive to consumers and promote competition
- access to basic bank accounts to make sure that all consumers legally resident in the EU have access to basic banking services, whatever their financial situation, to reduce financial and social exclusion
This contributes to our objectives of ensuring an appropriate level of consumer protection and promoting effective competition in the interests of consumers.
Following the UK’s withdrawal from the EU, the PARs have been amended by the Payment Accounts (Amendment) (EU Exit) Regulations 2019.
Reporting under the PARs (SUP16.22)
Under the PARs, we must gather certain data (on basic bank accounts and switching) from payment service providers (PSPs) that offer payment accounts covered by those regulations.
Guidance on the information you must provide can be found at SUP16 Annex 41B.
It is your responsibility to determine whether you provide payments accounts of the type covered by the PARs and, if so, you must provide the relevant information to us in line with SUP16.22.
When considering whether you offer payment accounts within the meaning of the PARs, you should refer to our guidance on the definition of a payment account (FG16/6: Payment Accounts Regulations 2015).
We have contacted PSPs that could offer payment accounts, based on their permissions, to remind them of this requirement and to provide an electronic form to submit the information to us.
If your firm offers payment accounts and we have not contacted you, or you have any other queries, please email [email protected].
Who the PARs affect
The parts of the PARs relating to fee information and switching, benefit consumers who have a current account or other type of payment account (including packaged accounts), or who are considering opening one.
The provisions on basic bank accounts ensure all consumers can access basic banking services throughout the UK, regardless of their nationality or place of residence.
More information about access to basic bank accounts can be found on the MoneyHelper website.
The provisions of the PARs on fee information and switching are to be applied by PSPs (including banks and building societies) in respect of the payment accounts they offer to consumers.
The PARs cover accounts that provide consumers with certain functionalities:
- placing funds in the account
- withdrawing cash from the account
- executing payment transactions to third parties, including credit transfers
- receiving payment transactions from third parties
The obligation to offer basic bank accounts (also called 'payment accounts with basic features') applies only to credit institutions designated by the Treasury under the PARs. For information on the designated institutions, see the Treasury website.
A payment account with basic features must provide the functionalities set out in the PARs and be available free of charge. Designated credit institutions must provide these accounts to at least the consumers meeting the eligibility criteria defined in the PARs.
FCA and PARs
Handbook changes and guidance
The PARs required some changes to our Handbook. In March 2016, we published a Consultation Paper on the PARs.
Having considered respondents' feedback, we published a Policy Statement on the PARs, the final Handbook changes and finalised guidance on 1 August 2016.
In summary, we have:
- issued guidance on the definition of a ‘payment account’ under the PARs
- issued guidance on the implementation of the PARs provisions on packaged accounts
- introduced new regulatory reporting requirements in relation to switching and payment accounts with basic features
- made minor Handbook changes in order to take account of the provisions in the PARs on packaged accounts and switching
- updated our Decision Procedures and Penalties Manual (DEPP) and Enforcement Guide (EG) to reflect the powers of enforcement we have been given under the PARs
Standardising terms and definitions
The PARs also introduced a requirement to standardise terms and definitions to describe the key services that are linked to payment accounts and subject to a fee.
As part of this process, we were required to develop a list of the key services linked to payment accounts in the UK. We published a Call for Input in June 2015 asking for views on the services we propose to include on the list, and terms and definitions to describe them.
We published a Feedback Statement in September 2015 in which we summarise the feedback we received to our Call for Input and explain how we have used it to finalise the provisional UK list of services, terms and definitions.
On 30 April 2018, we published the UK final linked services list.
Handbook changes and guidance: what you need to do
The provisions of the PARs on packaged accounts, switching and payment accounts with basic features came into force on 18 September 2016. Our Handbook changes came into effect on the same day.
If you’re a PSP that offers, or is planning to offer, payment accounts within the meaning of the PARs, you should make sure you comply with the PARs and Handbook changes. You may also find it helpful to familiarise yourself with our guidance:
- guidance on the definition of a 'payment account' under the PARs
- guidance on the implementation of the PARs provisions on packaged accounts
Transparency and comparability: what you need to do
If you’re a PSP that offers payment accounts, you must use the terms in the ‘linked services list’ in your contractual, commercial and marketing information. A glossary of at least the terms set out in the linked services list and the associated definitions must also be made available to consumers.
You must also:
- provide consumers with a pre-contractual fee information document (this aims to help consumers to compare payment account fees more easily)
- provide consumers with an annual statement of fees, giving them an overview of fees charged and interest earned (this aims to help consumers understand the fees incurred and enable them to consider their banking arrangements)
Within these documents, you must use the terms in the final linked services list.