CP18/21: General standards and communication rules for the payment services and e-money sectors

Open consultation: CP18/21
Consultation closes
Policy Statement
January 2019

We are consulting on proposals to apply existing rules and guidance that clarify our expectations on conduct and communication across the payment services and e-money sectors. We are also proposing new standards for the communication of payment services and e-money involving a currency conversion.

Read CP18/21 (PDF)

Payment service providers (PSPs) and e-money issuers are subject to different regulatory requirements, as both FSMA and non-FSMA firms operate in these sectors. This creates a mismatch in conduct standards and communications requirements for these firms. We consider that these differences need to be addressed.

In 2017, we were given new rulemaking powers in relation to payment services and electronic money under the Payment Services Regulations 2017. We plan to consult on exercising these new powers and apply a collective set of standards across the market.

We want to ensure that all firms in these sectors are subject to the fundamental obligations we expect regulated firms to comply with. These are the Principles for Businesses. This consultation proposes to apply the Principles to any provision of payment services and issuance of e-money.

We are also concerned about consumer harm, as a result of some firms’ communication practices. This includes misleading advertising and marketing of services. To address this, we plan to apply certain existing rules and guidance to the communication with payment services and e-money customers.

For example, we have raised concerns on the way in which some firms providing currency exchange transfers communicate their services to customers. We propose to introduce specific rules and guidance to ensure that these services are promoted and advertised in a way that is clear, fair and not misleading.

Who this applies to and who should read the consultation

PSPs and e-money issuers, as well as consumer bodies and relevant trade bodies should read this paper. Customers using payment services and e-money will be impacted by this consultation.

A summary of our proposals




Extending the application of the Principles for Businesses

The Principles would apply to payment services and issuance of e-money

Principles for Businesses set out the high-level standards that we expect firms we regulate to comply with. The Principles are: Integrity; Skill, care and diligence; Management and control; Financial prudence; Market conduct; Customers' interests; Communications with clients; Conflicts of interest; Customers: relationships of trust; Clients' assets; Relations with regulators

Extending rules and guidance concerning communication with retail banking customers

Communication with payment services and e-money customers

We want to ensure that firms communicate their services to their customers in a clear and transparent way

New rules and guidance on currency exchange transfer services

Payment services and e-money involving a currency conversion

We aim to prevent the marketing and promotion of currency exchange transfer services with exchange rates that are unachievable, as well as the use of unsubstantiated claims.

Overall objectives of this work

  • We want to set clearer expectations for the payment services and e-money sectors. These include applying the Principles for Businesses to all payment services and e-money firms.
  • Apply certain rules and guidance on how payment and e-money sector firms can communicate with their customers.
  • Introduce specific guidance on the communication and marketing of currency exchange transfer services, to prevent firms from misleading consumers.
  • Address complaints about online financial advertising that is unclear, unfair or potentially misleading.

Implications for firms

  • Ensuring that you run your business with regard to the Principles set out, including integrity, skill, care, reasonable care and financial prudence.
  • Ensuring that your treat customers fairly and have regard to their needs, including managing any conflicts of interest and protecting their assets.
  • In particular when advertising services, ensuring that they are clear, fair and not misleading, including when it comes to any costs related to currency conversion that is part of a payment service or e-money issuance.
  • Being frank and open with us and other regulators.

Protecting consumers

  • Our proposals seek to protect consumers.
  • If consumers are unable to understand communications or are misled about the services they use, they may miss out on services which best fit their needs.
  • Introducing requirements and identifying specific misleading communication and/or advertising practices by firms can help us limit consumer detriment.

What you need to do

Please send us your comments by 1 November 2018.

Online response form

You can also:

  • email your responses to [email protected]; or
  • write to Andreea Dobra, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN

Next steps

We will consider your feedback and expect to publish our rules in a Policy Statement before 31 January 2019.