The FCA will implement stricter rules for electronic payment firms starting in May 2026. Companies must keep customer money separate to protect funds in case of failure. The use of online money accounts has increased five-fold from 2017 to 2022. Larger payment firms will face monthly reporting, annual audits, and daily checks to ensure customer protection.

The new rules will apply to payment institutions, EMIs, and credit unions issuing e-money. EMIs in London have benefited from lighter regulations compared to banks. Argentex, an EMI since 2018, fell into special administration due to market volatility. Failed payment firms had an average shortfall of 65% of customer funds over a five-year period.

Matthew Long of the FCA emphasizes the importance of protecting customers from financial losses. UK Finance urges a thorough assessment of the new safeguarding rules’ impact before further changes are considered. The goal is to strike a balance between customer protection and realistic demands on businesses, especially smaller firms, to remain internationally competitive.

Read more at Yahoo Finance: UK watchdog to tighten rules for payment firms from May 2026