Electronic money and payment service providers: conduct of business requirements

Read more about how conduct of business requirements affect payment service providers (PSPs) and electronic money issuers.

The Payment Services Regulations 2017 (PSRs 2017) conduct requirements apply to all payment service providers including e-money institutions (EMIs) providing payment services. The Electronic Money Regulations 2011 (EMRs) conduct requirements apply to all e-money issuers.

Full details are set out in:

Conduct of business and the PSRs 2017

Part 6 and 7 of the PSRs 2017 set out conduct of business requirements that apply to the provision of payment services from an establishment in the UK maintained by:

  • a payment service provider or
  • its agent

PSPs must provide users with a range of information, including:

  • pre-contract information, such as terms and conditions, and
  • post contract information such as amount and currency of payment transactions

Other provisions regulate the rights and obligations of payment service users and providers. For example, firms are prevented from deducting charges unless otherwise agreed.

Conduct of business and the EMRs

Part 5 of the EMRs sets out conduct of business requirements that apply to the conduct of e-money business where the issuance or redemption of the electronic money  is carried out from an establishment in the UK maintained by:

  • an electronic money issuer or
  • its agent

They relate to:

  • issuing and redeeming e-money
  • the prohibition on the payment of interest or other benefits linked to the length of time that e-money is held

Conduct of business and other legislation

In addition to complying with the PSRs 2017 and EMRs, PSPs and electronic money issuers will have to comply with other relevant legislation and rules. This may include:

  • relevant provisions of the the FCA Handbook (such as in the Dispute Resolution complaints source book (DISP) and the Supervision manual (SUP)
  • Consumer Credit Act 1974 – see Parts I and II of Chapter 8 of the Approach Document
  • Distance Marketing Directive – see the Distance Marketing Regulations 2004
  • Cross-border payments and Single Euro Payments Area (SEPA) legislation
  • E-Commerce Directive (2000/31/EC)
  • Part 2 of the Consumer Rights Act 2015 and the Unfair Terms in Consumer Contracts Regulations 1999 – read more about unfair terms
  • Consumer Protection from Unfair Trading Regulations 2008 (CPRs)
  • Payment Account Regulations 2015 (PARs)
  • Interchange Fee Regulation (IFR)
  • Data Protection legislation
  • Anti-money laundering and terrorist financing legislation 
  • EBA Guidelines on the remuneration of sales staff

Payment service providers and electronic money issuers that are credit institutions or are authorised under FSMA for a separate regulated activity (such as credit related activities) will also have to comply with their obligations under that act and  the Handbook, including:

Corporate opt-out 

The 'corporate opt-out' enables payment service providers to agree different terms with their customers for certain conduct of business provisions.

The corporate opt-out is only available where the customer is not:

  • a consumer
  • a micro-enterprise, or
  • a charity with an annual income of less than £1m

The corporate opt-out must be agreed by the customer. This can be done through account terms and conditions.