UK Statutory Instrument 2017 United Kingdom

Payment Services Regulations 2017

What this means for your business

73 obligations
10 penalties
2 can imprison
3 guides
Enforced by
FCA, PSR
Applies to
United Kingdom
On this page
73 compliance obligations, 3 practical guides across 3 topics
Read full text on legislation.gov.uk

What you must do

73 compliance obligations under this legislation — 2 can result in imprisonment.

Management duties 22

Apply strong customer authentication and protect users’ credentials

If your business provides payment services, you must use strong customer authentication (SCA) whenever a customer accesses their account online, makes an electronic payment, or performs any remote action that could lead to fraud. The authentication must dynamically link the transaction to the exact amount and payee, and you must keep the security credentials confidential and secure.

Trader/Business s.100 FCA When a customer accesses their payment account online, initiates an electronic payment, …

Block only exact authorised amounts and release funds promptly

If your business provides card‑based payment services and a transaction is started by the payee but the amount isn’t known when the payer authorises it, you must not hold (block) any money unless the payer has specifically authorised that exact amount. As soon as you learn the final amount – or as soon as you receive the payment order – you must free any blocked funds without delay.

Trader/Business s.78 FCA When a card‑based payment is initiated by the payee and the transaction …

Charge customers only where permitted and ensure charges are paid correctly

If your business provides payment services, you may only levy fees that are allowed by the regulations, that the customer has agreed to, and that reflect your actual costs. You must also make sure the payer pays any fees you charge and the payee pays any fees charged by their provider, and you cannot stop the payee from asking for, offering or steering customers towards cheaper payment methods.

Trader/Business s.66 FCA When a payment transaction involves a payer and a payee whose payment …

Ensure payment‑system access rules are fair and proportionate

If your business is an authorised or registered payment service provider, any rules you set for who can join or use a payment system must be objective, proportionate and non‑discriminatory. You may only restrict access where it is strictly needed to manage specific risks or protect the stability of the system, and you must not treat providers differently because of their status.

Any Person s.103 FCA Your business is an authorised or registered payment service provider (legal person)

Execute payments in agreed currency and disclose conversion charges

Unlimited fine

When you run a payment service or sell a transaction that involves changing currency, you must make sure the payment is carried out in the currency the parties agreed. If you offer a currency‑conversion option (for example at an ATM, at the checkout or as the payee), you must clearly show the payer the exchange rate you’ll use and any fees before the payment is made.

Trader/Business s.57 FCA When you offer a currency conversion service before a payment is initiated …

Grant credit only under strict conditions

If your business is an authorised or small payment institution and you decide to give credit as part of a payment service, you must only do so as ancillary credit linked to the transaction, must not use the customer’s transaction funds, and must keep enough of your own capital to cover the credit (as judged by the FCA). In practice this means you need clear credit‑granting rules and records to prove you meet these limits.

Trader/Business s.32 FCA When granting credit in connection with payment services such as execution of …

Maintain required capital levels at all times

If your business is authorised as a payment institution, you must always hold enough own funds to meet the higher of the regulator‑set initial capital or the amount calculated under the detailed capital rules. Your capital must be split correctly between Tier 1 and Tier 2, with most of Tier 1 being common equity, and you cannot count the same money elsewhere in your group.

Trader/Business s.22 FCA If your business is an authorised payment institution under the Payment Services …

Make funds available to payee immediately and credit/debit on the correct day

If you operate a payment service (e.g., a bank or payment platform), you must credit the payee’s account by the business day the money reaches your own account and make those funds instantly available to the payee. You also must not debit the payer’s account before the money is actually taken from it. This applies to payments that meet the conditions set out in paragraph 2 (no currency conversion, euro‑pound conversion, or only one provider involved).

Trader/Business s.89 FCA When a payment transaction meets the conditions in paragraph 2 – i.e., …

Manage operational & security risks and report annually to the FCA

If your business provides payment services, you must put in place a risk‑management system that identifies, controls and mitigates operational and security risks, and you need clear procedures for handling major incidents. You also have to give the FCA an up‑to‑date, detailed risk assessment each year (or more often if asked) showing how you are managing those risks.

Trader/Business s.98 FCA

Manage termination of payment services framework contracts

If you want to end your payment‑service agreement, you must give any notice the contract requires (the notice period cannot be longer than one month). Check that any termination fee the provider charges only covers its actual costs and that any advance payment is refunded proportionally. The provider cannot charge you after six months of the contract.

Trader/Business s.51 FCA When you decide to terminate a payment‑service framework contract

Obtain explicit user consent before handling personal data

If you run a payment service, you must not look at, use or keep any customer's personal data unless the customer has given you clear, explicit permission. Put a system in place to capture that consent and keep a record before you process any personal data.

Any Person s.97 FCA When accessing, processing or retaining personal data for the provision of payment …

Provide customers with ATM withdrawal charge information

If your business operates ATMs or offers cash‑withdrawal services covered by the regulations, you must tell customers about any fees before they make the withdrawal and again when they receive the cash. The information must include all the details set out in regulations 43, 45, 46 and 57.

Trader/Business s.61 FCA If you provide cash‑withdrawal services that fall within paragraph 2(o) of Schedule …

Provide objective, non‑discriminatory access to payment accounts

If you run a credit institution (bank), you must allow authorised payment service providers to use your payment‑account services on a fair, objective and proportionate basis. When they ask, you must tell them the criteria you use, apply those criteria consistently, and if you refuse or withdraw access you must inform the FCA with reasons.

Employer s.105 FCA When an eligible payment service provider requests access to payment‑account services, or …

Provide payment‑service information clearly and accessibly

When you supply information to customers about a payment you are handling, you must make it easy for them to get. If they ask, you must give it on paper or another durable medium, use plain language, and provide it in English unless both parties agree another language.

Trader/Business s.55 FCA Whenever you provide information required under the Payment Services Regulations (e.g., information …

Provide required pre‑contract information to payment service users

Before you sign a framework contract with a customer, you must give them a full set of information about your business, the payment service, any charges, how communication will work, security steps, how the contract can change or end, and how disputes are handled. This ensures the customer knows exactly what they are signing up for and their rights.

Trader/Business Schedule 4 FCA When concluding a framework contract for payment services with a customer

Refund unauthorised payments and restore accounts promptly

If a payment processed by your business was not authorised by the customer, you must give the payer back the money and put their account back to the state it would have been in if the payment had never happened. The refund must be made as soon as possible and no later than the end of the next business day after you become aware of the unauthorised transaction, and the account credit must be dated on the same day the money was taken out. If a payment‑initiation service was used and is liable, you must claim compensation from them.

Trader/Business s.76 FCA When an executed payment transaction is identified as unauthorised

Register agents with the FCA and keep their details up‑to‑date

If you provide payment services in the UK, you can only use an agent that is on the FCA’s register. You must apply to the FCA with the required information to get the agent registered, make sure the agent tells customers they are dealing with an agent, and promptly tell the FCA of any changes to the agent’s details.

Trader/Business s.34 FCA when you use an agent to deliver payment services in the United …

Request refunds within 8 weeks and supply required information

If you’ve paid for goods or services and want your money back, you must ask your payment service provider for a refund within 8 weeks of the charge. You may be asked to give reasonable information to prove the claim, and the provider must either refund you or explain why they can’t, usually within 10 business days.

Trader/Business s.80 FCA When you want a refund for a payment you have made

Secure payment instruments and manage loss notifications

If your business issues cards, virtual wallets or any other payment instrument, you must keep the user’s personal security details secret and never send an instrument the user hasn’t asked for (except for a replacement). You also need to give users a free way to tell you the instrument is lost or mis‑used, stop it from being used as soon as they do, and be able to provide proof of that notification for up to 18 months.

Trader/Business s.73 FCA When you issue a payment instrument to a payment‑service user

Treat indirect access requests to payment systems fairly and give reasons if refused

If your business runs a designated payment system and a fellow authorised or registered payment service provider asks to send payments through it, you must handle the request objectively, proportionately and without discrimination. You may only limit access where there is a clear risk, and you must not base any restriction on the other provider’s status. If you say no, you must explain why in full.

Trader/Business s.104 FCA When another authorised or registered payment service provider requests indirect access to …

Use payment accounts only for payment transactions

If your business is an authorised or small payment institution, you must only use the payment accounts you hold to carry out payment transactions. You cannot use those accounts for any other purpose such as lending, investing or any non‑payment activity.

Trader/Business s.33 FCA When you are an authorised or small payment institution that holds a …

Use payment instruments properly and protect security credentials

If your business has been issued a payment card, virtual payment token or any other payment instrument, you must use it only in line with the provider’s rules and immediately tell the provider if it is lost, stolen or mis‑used. You also need to keep any personal security codes or passwords for the instrument safe and secure.

Any Person s.72 FCA

Notifications 6

Notify customers when refusing a payment order

If your business provides payment services and you refuse to carry out a customer's payment order, you must tell the customer that the payment was refused, explain why (if you can), and give them instructions on how to fix any errors. This notice must be sent in the agreed way, as soon as possible and within the time limits set out in the regulations.

Trader/Business s.82 FCA When you, as a payment service provider, refuse to execute or initiate …

Notify FCA before outsourcing and keep controls in place

If your payment business wants to outsource any part of its payment services, you must tell the FCA before the contract starts and you must make sure the outsourcing does not weaken your internal controls or the FCA’s ability to monitor you. Any later changes to the outsourced function or provider must also be reported to the FCA promptly.

Trader/Business s.25 FCA When you intend to outsource any operational function (especially an important one) …

Notify FCA if limited network exclusion payments exceed €1m

If your business provides payment services that fall under the limited network exclusion and the total value of those transactions goes over €1 million in any 12‑month period, you must inform the FCA. The notification must describe the services and specify the exemption you rely on, and it must be sent within the timeframe the FCA sets after the year ends.

Trader/Business s.38 FCA Total value of limited network exclusion payment transactions exceeds €1 million in …

Notify FCA of significant changes to your payment services business

If you run an authorised payment institution, a small payment institution or a registered account information service provider, you must tell the FCA as soon as you become aware of any major change that could affect your authorisation, capital, financial limits or the use of agents. The notification must be made promptly, or before the change happens if it is substantial.

Any Person s.37 FCA When a significant change in circumstances that could affect your authorisation, capital …

Notify users of contract or rate changes at least two months in advance

If you provide payment services, you must give your customers written notice at least two months before any change to the contract terms or the information in Schedule 4. If your contract lets you change terms unilaterally, you must tell users they will be deemed to accept unless they object and that they can terminate the contract without charge. Any interest‑rate changes must be communicated as soon as possible and applied fairly.

Trader/Business s.50 FCA When you plan to change the framework contract terms, Schedule 4 information, …

Notify your payment provider of unauthorised or incorrect payments

If you discover a payment that was not authorised by you or was processed incorrectly, you must tell your payment service provider as soon as possible and certainly within 13 months of the debit date if you want to claim compensation. If the provider failed to give you the required transaction information, you can still claim even if you did not give notice.

Trader/Business s.74 FCA When you become aware of an unauthorised or incorrectly executed payment transaction

Other requirements 7

Do not block AIS or PIS where you are non‑compliant

If your business provides account‑servicing (e.g., a bank) and has not yet met the required technical standards, you must not refuse or hinder customers from using account information services (AIS) or payment initiation services (PIS). You need to keep those services available even while you are working to become fully compliant.

Trader/Business s.154 FCA When the account‑servicing provider has not complied with the regulatory technical standards …

Make FCA information leaflet freely available to customers

If your business provides payment services, you must give customers free access to the FCA’s consumer‑rights leaflet. It should be posted on your website (if you have one), available in paper form at any branches, agents or outsourced locations, and also provided in formats that people with disabilities can use.

Trader/Business s.62 FCA

Provide prior general information before framework contracts

Unlimited fine

If your business provides payment services, you must give your customers the information set out in Schedule 4 before they are bound by a framework contract. If the contract is concluded remotely and you cannot give the information beforehand, you must supply it immediately after the contract is signed. You can satisfy the duty by handing over a copy of the draft contract that already contains the required details.

Trader/Business s.48 FCA When concluding a framework contract with a payment‑service user

Provide required payment information immediately after initiating a payment order

Unlimited fine

If your business offers a payment initiation service, you must instantly give the payer (and, where relevant, the payee) confirmation that the payment order was received, a reference they can use to identify the transaction, the amount being paid and any fees you charge. You also have to pass that reference on to the payer’s own bank or payment provider.

Trader/Business s.44 FCA When you initiate a payment order through a payment initiation service

Provide required pre‑contract information to payment service users

If your business provides single payment services you must give customers certain key details – like the identifier they need, how long the payment will take, any charges and the exchange rate – before they are bound by the contract (or straight after the transaction if it’s a distance sale). If you act as a payment‑initiation service, you also need to give your name, address, contact details and FCA contact information before the payment is started.

Trader/Business s.43 FCA When concluding a single payment service contract or initiating a payment through …

Provide users with required information and charge breakdown

If your business offers account‑information services, you must give each user the information set out in Schedule 4 that relates to the service and clearly show any fees you charge, including a breakdown where relevant. This information has to be supplied to the user as part of the service agreement.

Trader/Business s.60 FCA

Respond to the PSR within 21 days when a compliance failure is proposed

If the Payment Systems Regulator is planning to publish a compliance failure about your business or to impose a penalty, it must first give you written notice. You then have 21 days to submit written representations or evidence that you disagree or to explain why the penalty isn’t necessary.

Any Person s.128 FCA When a Payment Systems Regulator decides to publish a compliance failure or …

Payments and fees 15

Compensate other payment providers for losses you cause

If your business acts as a payment service provider or intermediary and a loss occurs because you failed to meet the rules on unauthorised or defective payments (or did not use strong customer authentication), you must pay the other provider back for any money they had to spend to cover the loss. In practice you need to have processes and funds in place to reimburse those losses promptly.

Trader/Business s.95 FCA When a loss under regulations 76, 91, 92 or 93 (or a …

Do not debit payments before receiving the payment order

If your business provides payment services, you must wait until you have actually received a customer's payment order before taking money from their account. "Receipt" is the moment the order reaches you, unless it falls on a non‑business day or after a cut‑off time you set, in which case it is treated as the next business day. You need systems that record receipt times and enforce these rules.

Trader/Business s.81 FCA When you act as the payer’s payment service provider processing a payment …

Do not revoke a payment order after it’s been received

If your business sends a payment, you cannot cancel it once the payer’s payment‑service provider has received the order (or after the revocation deadline for direct debits and scheduled payments). You can only cancel later if you have a prior agreement with the provider – and, for direct debits or payee‑initiated payments, also with the payee. Plan any needed cancellations before you send the payment.

Any Person s.83 FCA When a payment order has been received by the payer’s payment‑service provider …

Ensure full payment amount is transferred and fees are disclosed

When you act as a payment service provider, you must pass on the whole amount the customer intends to pay – you can’t take any of it as a fee unless the payee has agreed and you’ve clearly told them the fee amount. If any other charges are taken, you must still make sure the payee receives the full original amount.

Trader/Business s.84 FCA

Inform customers of any payment charges or reductions before the transaction

If your business receives a payment (you are the payee) or you provide payment services, you must tell the other party about any fee you will charge or any discount you are offering for using a particular payment method. This information has to be given before the payment is started, otherwise the customer can refuse to pay the charge.

Trader/Business s.58 FCA Before a payment transaction is initiated

Make funds available immediately to payees without an account

If your business provides payment services and you accept money for a customer who does not have a payment account with you, you must release that money to the customer straight away as soon as it is credited to your own account. There is no permitted delay.

Trader/Business s.87 FCA You accept funds on behalf of a payee who does not have …

Pay restitution if ordered by the FCA

If the FCA decides you must repay money (or distribute it to others) under the Payment Services Regulations, you will first receive a warning notice and can make representations. If the FCA then issues a decision notice, you must pay the specified amount to the people they name, following the arrangements they set out. You can also appeal the decision to the Upper Tribunal.

Any Person s.115 FCA The FCA decides to exercise its power under regulation 114(2) and issues …

Provide pre‑payment information to payers on request

Unlimited fine

If a customer asks for details before they make a payment under a framework contract, you must tell them how long the payment could take, what fees they will be charged and, where needed, a breakdown of those fees. This information has to be given before the transaction is carried out, so the customer can decide whether to proceed.

Trader/Business s.52 FCA When a payer initiates an individual payment transaction under a framework contract …

Provide prompt availability of cash deposits

If you run a payment service and a customer puts cash into their account in the same currency, you must make the money available straight away for consumers, micro‑enterprises and charities. For all other customers you must have the money available by the end of the next business day.

Trader/Business s.88 FCA Cash placed on a payment account in the same currency as the …

Provide transaction details to payee immediately after payment

When your business acts as a payment service provider and a payment is completed, you must instantly give the payee a clear breakdown of the transaction. This includes a reference, the amount they receive, any charges taken, the exchange rate (if used) and the date the funds become available.

Trader/Business s.46 FCA Whenever a payment transaction is executed

Refund and compensate for failed payment‑initiation transactions

If a customer uses a payment‑initiation service and the payment is not carried out, is defective or is late, the bank (or other account‑servicing provider) must refund the customer and put the account back in its original state. If the payment‑initiation service cannot prove the fault was not its own, it must immediately pay the bank back for any loss or refund it caused.

Trader/Business s.93 FCA A payment order is initiated by the payer through a payment‑initiation service …

Refund and correct defective or late payer‑initiated payments

Unlimited fine

If your business provides payment services and a customer’s payment that they started themselves is not carried out, is faulty, or arrives late, you must quickly refund the money and put the customer’s account back to how it was. You also have to make sure the payee receives the funds on time and, on request, trace the missing payment and tell the customer what happened.

Trader/Business s.91 FCA When a payment order initiated directly by the payer is not executed, …

Refund charges and interest for delayed payments

If you run a payment service, you must pay back any fees and interest that a customer would have to cover when a payment order is delayed under regulation 86(2B). This applies even if the payment is never ultimately completed. In practice you need to have a process to calculate and reimburse those amounts promptly.

Trader/Business Liability of payment service provider for charges FCA A payment order is delayed in reliance on regulation 86(2B), regardless of …

Refund unauthorised or over‑charged payee‑initiated payments

If a customer makes a payment where the amount wasn’t fixed beforehand and they have been charged more than they could reasonably expect, you must refund the full amount. The refund must be credited to the customer’s account on the same day the original charge was taken, unless you have a contract that explicitly excludes the right to a refund and the customer gave direct consent.

Trader/Business s.79 FCA When a payment was authorised without a specified amount and the charged …

Reimburse user for charges and interest caused by payment failures

If your business provides payment services and a transaction is not carried out, is defective or delayed, you must pay back any fees the customer was responsible for and any interest they incur because of the failure. This liability applies each time a payment service user suffers a loss due to your non‑execution, defective execution or late execution of a payment.

Trader/Business s.94 FCA When a payment transaction you handle is not executed, is defective, or …

Offences and prohibitions 4

Carry out unauthorised payment services

Unlimited fine

If your business provides a payment service in the UK without a valid FCA authorisation or registration – or pretends to have one – you are deemed to have broken a requirement of the Payment Services Regulations. That breach can lead to criminal prosecution, with the potential for an unlimited fine and a possible custodial sentence.

Any Person s.21 FCA

Give false or misleading information to the FCA or PSR

Unlimited fine

If you knowingly or recklessly supply information that is false or materially misleading to the Financial Conduct Authority or the Payment Systems Regulator – or pass such information to someone who will use it for those regulators – you commit a criminal offence. On conviction you face an unlimited fine, whether the case is dealt with in the magistrates' court or the Crown Court.

Any Person s.142 FCA

Make false claim you are a payment service provider

3 months imprisonment

If you describe yourself, or behave in a way that suggests, you are a regulated payment‑service provider or exempt when you are not, you commit an offence. On conviction you can be sentenced to up to three months in prison, an unlimited fine, or both. The case is dealt with in the magistrates' court (summary trial).

Any Person s.139 FCA

Provide unauthorised payment services

2 years imprisonment

If your business offers a payment service in the UK without being an authorised payment institution, a small payment institution, a registered account information service provider, an exempt credit or electronic‑money institution, the Post Office, the Bank of England, a government department, a local authority or otherwise exempt, you commit a criminal offence. On conviction you can be sentenced to up to three months’ imprisonment and a fine in the magistrates’ court, or up to two years’ imprisonment and an unlimited fine in the Crown Court.

Any Person s.138 FCA

Record keeping 2

Keep payment‑service records for at least five years

If your business is an authorised or a small payment institution, you must retain all records that show you are complying with the Payment Services Regulations. Keep those records for at least five years from the date they were created, so the FCA can check your compliance when needed.

Trader/Business s.31 FCA You are an authorised payment institution or a small payment institution

Provide evidence of authorised and correctly executed payments

If a customer says they did not authorise a payment or that a payment was not carried out correctly, your business must be able to prove that the transaction was authenticated, recorded accurately and was not affected by a technical failure. If you claim the customer acted fraudulently or was negligent, you must also give them the supporting evidence.

Trader/Business s.75 FCA When a payment service user disputes a payment or the provider alleges …

Registration and licensing 7

Apply for authorisation or registration when requirements cease to be met

If your business is a small payment institution and it stops meeting the conditions for that status, or you want to offer services that aren’t allowed under your current registration, you must apply for the correct authorisation or registration within 30 days if you still want to provide payment services in the UK.

Trader/Business s.16 FCA Small payment institution no longer meets a condition in regulation 14(3), (5) …

Apply to FCA for registration or variation as a small payment institution

If your business wants to become a small payment institution, or change an existing registration, you must submit an application to the FCA with all the information it asks for. The FCA can also tell you to provide extra details before it makes a decision, and you must follow any format or timing directions it gives.

Trader/Business s.13 FCA When you seek to register as a small payment institution or vary …

Meet all conditions to register as a small payment institution

If you want to be registered as a small payment institution, you must satisfy a set of FCA conditions – including transaction‑volume limits, not offering account‑information or payment‑initiation services, having a UK head office, and ensuring that the people running the business are fit and proper with no relevant convictions. You need to provide the necessary information and evidence in your application.

Any Person s.14 FCA When applying to register as a small payment institution

Meet FCA conditions for payment institution authorisation

If you want your business to be authorised as a payment institution, you must satisfy a number of FCA conditions before the authorisation is granted. This includes having the required capital, being a UK‑incorporated company with a UK head office, running at least part of the payment service in the UK, putting in place robust governance, risk and internal‑control systems, ensuring directors and major shareholders are fit‑and‑proper, preparing a detailed business plan with safeguards for users' funds, holding relevant professional indemnity insurance, complying with AML registration and managing any close links with other firms.

Director/Officer s.6 FCA When applying for FCA authorisation as a payment institution

Meet registration conditions for an account information service provider

If you want to become a registered account information service provider, you must submit an application that satisfies all the FCA’s conditions. This means you can only offer account‑information services (no other payment services) and you must have professional indemnity insurance that covers the territories you intend to operate in and the liability the FCA may set.

Trader/Business s.18 FCA When applying to be registered as an account information service provider

Submit a complete FCA authorisation (or variation) application

If you want your business to be authorised as a payment institution, you must send the FCA a full application that includes the information set out in Schedule 2. If you are changing an existing authorisation you must also state the proposed change, the services you will provide and any other information the FCA asks for. The FCA can tell you how to submit the application and may request further details before it decides.

Trader/Business s.5 FCA When applying for authorisation as a payment institution or seeking to vary …

Submit FCA registration application for account information services

If you want to offer account‑information services, you must lodge an application with the FCA. The application must contain all the information set out in Schedule 2 and be presented in the way the FCA tells you. The FCA can also ask for extra information before it decides on your application.

Trader/Business s.17 FCA When you seek to register as, or vary the registration of, an …

Reporting and filing 10

Notify FCA and provide annual audit for electronic‑communications payment services

If your business offers a payment service that falls under the ‘electronic communications exclusion’, you must tell the FCA about the service and give a description of it before you start providing it (or by 13 Jan 2018 if you were already operating). You also have to supply an annual audit opinion confirming that the transactions stay within the limits set out in the regulation.

Trader/Business s.39 FCA Providing a payment service that meets the electronic‑communications exclusion (paragraph 2(l) Schedule …

Notify FCA of material changes or inaccuracies in your application

If your business has applied to the FCA for authorisation, registration as a small payment institution, or as an account information service provider, you must tell the FCA as soon as you become aware of any material change to the information you supplied, or if you discover that the information was incomplete or inaccurate, before the FCA makes a decision on your application.

Trader/Business s.20 FCA After submitting an FCA application, if a material change occurs or you …

Provide contract information on request

If a customer asks, you must give them the information set out in Schedule 4 and the full terms of your framework contract while the contract is still in force. This means keeping those documents ready and sending them promptly whenever a user requests them.

Trader/Business s.49 FCA When the payment service user requests the information during the contractual relationship

Provide monthly payment details to payees free of charge

If you run a payment service that has a framework contract with a payee, you must send the payee a monthly statement (on paper or any durable medium) showing the transaction reference, amount, any charges, exchange rate and credit date – and you must do it at no cost to the payee. You can meet this by building the requirement into your contract, as long as the payee can store an unchanged copy.

Any Person s.54 FCA When you are the payee’s payment service provider under a framework contract

Provide monthly transaction information to payers free of charge

If your business provides payment services under a framework contract, you must give each payer a statement at least once a month, free of charge, showing a reference for the payment, the amount, any charges or interest, the exchange rate used (if any) and the date. The statement can be on paper or any other durable medium agreed with the payer.

Trader/Business s.53 FCA You have a framework contract with a payer as a payment service …

Provide required payment details to the payer immediately

When your business receives a payment order from a customer, you must instantly give the customer clear information about that transaction – a reference, the amount, any charges, the exchange rate (if used) and the date you received the order. This lets the customer know exactly what is being paid and any costs involved.

Trader/Business s.45 FCA Whenever your business receives a payment order from a payer

Provide separate payment‑services accounts and audit to the FCA

If your business is an authorised payment institution that also carries out other (non‑payment) activities, you must keep a separate set of accounts just for the payment‑services part of the business. Those accounts must be audited and the auditor may have to report certain material issues to the FCA.

Trader/Business s.24 FCA Your firm is an authorised payment institution that also provides non‑payment‑service activities

Report information and annual fraud data to the FCA

If your business provides payment services in the UK, you must give the Financial Conduct Authority any information it asks for, and you must also send it statistics on payment‑method fraud at least once a year. The FCA decides the format, timing and how the information is checked, so you need to be ready to supply it when required.

Trader/Business s.109 FCA If you are a payment service provider operating in the United Kingdom

Report major incidents to FCA and inform affected users

Unlimited fine

If your business provides payment services and a major operational or security incident occurs, you must promptly tell the FCA and, where the incident could affect customers' money, you must also inform those customers of what happened and what they can do to protect themselves.

Trader/Business s.99 FCA When a major operational or security incident is identified, and where the …

Submit cancellation request in FCA‑directed format

If you decide to give up your payment services authorisation, you must send the request exactly as the FCA tells you to. The FCA can also ask you for extra information before it decides on your request, so be ready to provide whatever is needed.

Any Person s.11 FCA when you want to cancel your authorisation under regulation 10(1)(b)

Penalties for non-compliance

10 penalties under this legislation. 2 can result in imprisonment. 10 carry an unlimited fine.

Prison risk

Make false claim you are a payment service provider

Unlimited fine and/or 3 months imprisonment

Summary only s.139 Penalises: Make false claim you are a payment service …
Prison risk

Provide unauthorised payment services

Unlimited fine and/or 2 years imprisonment

Either way s.138 Penalises: Provide unauthorised payment services
Unlimited fine

Fail to provide required charge and exchange‑rate information

Unlimited fine

Summary only s.141 Penalises: Execute payments in agreed currency and disclose conversion …
Unlimited fine

Provide prior general information before framework contracts

Unlimited fine

s.48 Penalises: Provide prior general information before framework contracts
Unlimited fine

Provide required payment information immediately after initiating a payment order

Unlimited fine

s.44 Penalises: Provide required payment information immediately after initiating a …
Unlimited fine

Provide pre‑payment information to payers on request

Unlimited fine

s.52 Penalises: Provide pre‑payment information to payers on request
Unlimited fine

Refund and correct defective or late payer‑initiated payments

Unlimited fine

s.91 Penalises: Refund and correct defective or late payer‑initiated payments
Unlimited fine

Carry out unauthorised payment services

Unlimited fine

s.21 Penalises: Carry out unauthorised payment services
Unlimited fine

Give false or misleading information to the FCA or PSR

Unlimited fine

Either way s.142 Penalises: Give false or misleading information to the FCA …
Unlimited fine

Report major incidents to FCA and inform affected users

Unlimited fine

s.99 Penalises: Report major incidents to FCA and inform affected …

Practical guidance

Our guides explain how to comply with the requirements above.

Sections and provisions

163 classified provisions from this legislation.

Duties 77

  • Schedule 4 Prior general information for framework contracts agreements relating
  • s.5 Application for authorisation as a payment institution or variation of an existing authorisation
  • s.6 Conditions for authorisation as a payment institution risks
  • s.11 Request for cancellation of authorisation
  • s.12 Variation of authorisation on FCA's own initiative
  • s.13 Application for registration as a small payment institution or variation of an existing registration
  • s.14 Conditions for registration as a small payment institution of regulations 11
  • s.16 Application for authorisation or registration if requirements cease to be met
  • s.17 Application for registration as an account information service provider or variation of an existing registration
  • s.18 Conditions for registration as an account information service provider The application
  • s.20 Duty to notify changes
  • s.22 Capital requirements An authorised payment institution
  • s.24 Accounting and statutory audit of the circumstances referred
  • s.25 Outsourcing operational function relating
  • s.31 Record keeping
  • s.32 Additional activities
  • s.33 Payment accounts and sums received for the execution of payment transactions
  • s.34 Use of agents representations made in response
  • s.37 Duty to notify change in circumstance information
  • s.38 Notification of use of limited network exclusion the service provider
  • ... and 57 more duties

Offences and penalties 10

  • s.21 Authorised payment institutions, small payment institutions and registered account information service providers acting without permission
  • s.111 Financial penalties
  • s.126 Publication of compliance failures and penalties
  • s.127 Penalties
  • s.138 Prohibition on provision of payment services by persons other than payment service providers
  • s.139 False claims to be a payment service provider or exempt
  • s.141 Contravention of regulations 57 and 58
  • s.142 Misleading the FCA or the Payment Systems Regulator
  • s.143 Restriction on penalties
  • s.144 Liability of officers of bodies corporate etc

Powers 16

  • s.7 Imposition of requirements
  • s.10 Cancellation of authorisation
  • s.35 Removal of agent from register
  • s.71 Limits on the use of payment instruments and access to payment accounts
  • s.106 Functions of the FCA
  • s.110 Public censure
  • s.113 Injunctions
  • s.114 Power of FCA to require restitution
  • s.116 Restitution orders
  • s.120 Guidance
  • s.124 Functions of the Payment Systems Regulator
  • s.129 Injunctions
  • s.131 Appeals against directions and publication of compliance failures
  • s.132 Appeals in relation to penalties
  • Single Euro Payments Area Single Euro Payments Area
  • Technical standards Technical standards

Definitions 13

  • Schedule 1 Payment Services relevant person
  • s.2 Interpretation the 2000 Act account information service account information service provider
  • Schedule 3 Capital requirements Method A Method B Payment volume
  • s.23 Safeguarding requirements asset pool authorised insurer authorised credit institution
  • s.41 Application of this Part in the case of consumer credit agreements
  • s.56 Charges for information
  • s.67 Consent and withdrawal of consent
  • s.90 Incorrect unique identifiers relevant requirement
  • s.123 Interpretation of Part 10 the 2013 Act compliance failure qualifying requirement
  • s.125 Directions
  • s.134 Guidance general guidance
  • s.137 Prohibition on contracting out of statutory requirement
  • Schedule 3A Application and modification of the Banking Act 2009 relevant funds asset pool

Exemptions 21

  • s.40 Application of Part 6
  • s.42 Disapplication of certain regulations in the case of low-value payment instruments
  • s.63 Application of Part 7
  • s.64 Application of this Part in the case of consumer credit agreements
  • s.65 Disapplication of certain regulations in the case of low value payment instruments
  • s.68 Confirmation of availability of funds for card-based payment transactions
  • s.69 Access to payment accounts for payment initiation services
  • s.70 Access to payment accounts for account information services
  • s.77 Payer or payee's liability for unauthorised payment transactions
  • s.85 Application of regulations 86 to 88
  • s.86 Payment transactions to a payment account
  • s.92 Non-execution or defective or late execution of payment transactions initiated by the payee
  • s.96 Force majeure
  • s.101 Dispute resolution
  • s.102 Application of regulation 103
  • s.107 Application of this Part to requirements of assimilated direct legislation and FCA rules
  • s.118 Costs of supervision
  • s.121 FCA's exemption from liability in damages
  • s.140 Defences
  • s.145 Prosecution of offences
  • ... and 1 more exemptions