Consumers will be better protected when they use payment firms, with the introduction of new rules to protect their money from May 2026. These changes will improve safeguarding practices among payment firms.
Safeguarding means that customer money must be kept separate from the firm’s own money so that it is available to be returned if the firm fails.
Following constructive engagement with industry, the FCA has confirmed[1] that the new rules will kick in after 9 months, giving industry time to prepare. It has also made changes to ensure that rules are proportionate for smaller firms, such as by removing the requirement for audits if a firm holds less than £100,000 in customer funds.
These rules mean that consumers are better protected, and if a payment or e-money firm fails they are more likely to get a full refund and with fewer delays.
The new rules require:
- Annual audits by qualified auditors.
- Monthly reporting for payment firms.
- Firms to conduct daily checks to make sure the right amount of money is being safeguarded to protect customers.
- Better planning if firms fail so customers receive their money back sooner.
These rules will address issues the regulator has found in previous failures of payment firms.
Payment firms that became insolvent between Q1 2018 and Q2 2023 had average shortfalls of 65% of their customers’ funds.
Matthew Long, director of payments and digital assets, FCA, said: 'People rely on payment firms to help manage their financial lives. But too often, when those firms fail, their customers are left out of pocket.
'Most of those who responded to our consultation agreed we need to raise standards to protect people’s money and build trust, but any changes needed to be proportionate, especially for smaller firms.
'We’ll be watching closely to see if firms seize the opportunity and make effective improvements that their customers rightly deserve – this will help us to determine whether any further tightening of rules is necessary.'
Notes to editors
- PS25/12: Changes to the safeguarding regime for payments and e-money firms.[1]
- Intended amendments to Payment Services and Electronic Money - Our Approach, May 2026 draft version[2].
- The FCA will be actively supporting industry through the implementation period to help them make changes, with webinars, events and our day-to-day supervisory work.
- Funds held by payment and e-money firms are not directly protected by the Financial Services Compensation Scheme (FSCS). Instead, firms must safeguard funds which can mean customers lose money or experience delays to funds being returned if the firm fails.
- The rules will come into effect on 7 May 2026.