1. Payment services based on instruments used within a limited network of service providers or for a very limited range of goods or services may be excluded from regulation under the PSRs 2017. Typical examples include gift cards, fuel cards and shopping centre cards.
2. You should review Q40 in PERG 15.5 to understand whether the service you provide can be operated under LNE or whether authorisation or registration is required. PERG 15 is amended by the Payment Services Instrument 2017 and you can see the revised PERG on our Handbook website by setting the date to 13 January 2018. Please also familiarise yourself with the Approach Document (Chapter 3 in particular) in light of the perimeter changes in PSD2 and recent developments in payment services.
3. Please note, changes in PSD2 mean some providers which currently rely on the LNE may now be brought within regulation, and therefore may need to be authorised or registered in order to continue their activities from 13 January 2018.
4. Businesses that operate, or intend to operate under the LNE will have to notify us if their transactions are over €1 million in any 12 month period (starting from 13 January 2018) and provide a description of their activities. When we receive this notification, we will decide if these services are excluded or not. If we disagree that the exclusion applies to a business, we will notify the provider, which has the right to refer the matter to the Upper Tribunal.
5. Businesses will need to continue to give us these notifications after every 12 month period, unless their transaction value falls below €1 million.
6. Businesses operating under the LNE will be entered onto the FCA’s Financial Services Register along with a description of the services provided under the exclusion.
7. If the conditions for notification are met on 13 January 2019, a business must submit the notification by 10 February 2019, which is 28 days after the 13 January 2019. If a business wishes to submit a services notification before the 10 February 2019 deadline then the service provider may do so at any time from 13 October 2017. There will be a fee of £300 for the notification.
8. If you have any questions, you can contact us.