The Financial Conduct Authority (FCA) has announced new safeguarding rules for UK payment and e-money institutions, effective from 7 May 2026. The measures require firms to keep customer funds strictly separated from company funds, introduce daily balance checks, and mandate monthly reporting and annual audits for larger operators. These changes are designed to strengthen consumer protection following a period where failed payment companies lacked an average of 65% of their customers’ money between 2017 and mid-2023.
Matthew Long, director of payments and digital assets at the FCA, commented: “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.” He added, “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.”
The FCA’s new rules apply to:
- Payment institutions
- E-money institutions (EMIs)
- Credit unions issuing e-money
The regulatory update responds to rapid growth in the use of current accounts offered by these firms, with customer usage increasing fivefold since 2017. The FCA aims to ensure customer deposits are safeguarded, while also balancing regulatory requirements for both large and small businesses. A spokesperson noted, “We support a robust and effective safeguarding regime that protects customers without placing unrealistic demands on businesses, particularly smaller firms.”
Key measures summarised:
| Requirement | Applies to | Purpose |
|---|---|---|
| Customer funds kept separate from company funds | All regulated payment and e-money firms | Enhanced consumer protection |
| Daily safeguarding checks | All regulated firms | Ongoing accuracy of protected balances |
| Monthly reports & annual audits | Larger firms | Increased transparency and oversight |
For more details on regulatory developments and customer protection in UK payments, see the original source at Reuters.
