FCA unveils new payment safeguarding rules for May 2026

The UK’s financial watchdog has set out new payment safeguarding rules which will come into force in May next year.

Safeguarding means that customer money must be kept separate from the money of a firm so that it is available to be returned if the company fails.

The Financial Conduct Authority (FCA) has said that the new rules will require annual audits by qualified auditors, monthly reporting for payment firms, daily checks to make sure the right amount of money is being safeguarded to protect customers, and better planning if firms fail so customers receive their money back sooner.

The rules come after the regulator found previous failures of payment and e-money firms, with companies that became insolvent between 2018 and the second quarter of 2023 having an average shortfall of 65 per cent of their customers' funds.

It says that it has made changes to ensure that rules are proportionate for smaller firms, such as by removing the requirement for audits if a firm holds less than £100,000 in customer funds.

"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," said Matthew Long, director of payments and digital assets, FCA. "Most of those who responded to our consultation agreed we need to raise standards to protect people’s money and build trust, but any changes needed to be proportionate, especially for smaller firms."

He continued: "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."



Share Story:

Recent Stories


Data trust in the AI era: Building customer confidence through responsible banking
In the second episode of FStech’s three-part video podcast series sponsored by HCLTech, Sudip Lahiri, Executive Vice President & Head of Financial Services for Europe & UKI at HCLTech examines the critical relationship between data trust, transparency, and responsible AI implementation in financial services.

Banking's GenAI evolution: Beyond the hype, building the future
In the first episode of a three-part video podcast series sponsored by HCLTech, Sudip Lahiri, Executive Vice President & Head of Financial Services for Europe & UKI at HCLTech explores how financial institutions can navigate the transformative potential of Generative AI while building lasting foundations for innovation.

Beyond compliance: Transforming document management into a strategic advantage for financial institutions
In this exclusive fireside chat, John Rockliffe, Pre-Sales Manager at d.velop, discusses the findings of Adapting to a Digital-Native World: Financial Services Document Management Beyond 2025 and explores how FSIs can turn document workflows into a competitive advantage.

Sanctions evasion in an era of conflict: Optimising KYC and monitoring to tackle crime
The ongoing war in Ukraine and resulting sanctions on Russia, and the continuing geopolitical tensions have resulted in an unprecedented increase in parties added to sanctions lists.