The Financial Conduct Authority (FCA)’s newly finalised safeguarding rules for payments and e-money firms mark one of the most significant regulatory shifts for the sector in recent years.
Set to take effect from 7 May 2026, the changes follow the regulator’s continued concern over firm failures and resulting consumer harm.
Between Q1 2018 and Q2 2023, 12 payments firms that were safeguarding customer funds became insolvent. Alarmingly, the average shortfall in those insolvency cases was 65%, meaning customers recovered only a fraction of their money. These new rules aim to close that gap, boost confidence in the sector, and strengthen firm resilience.
Key changes for firms
The changes are broad and impactful. Most notably, safeguarding audits will now be mandatory for all payments and e-money firms, except for small payment institutions and payment initiation service providers….
