Significant Changes are Coming: UK Payments Regulation

By Kai Zhang, Philip Morgan, and Judie Rinearson

The UK Financial Conduct Authority (FCA) commenced, on 28 January 2021, a consultation (CP21/3) on various changes to the UK regulation of payment services and electronic money. The proposals include amendments to the substantive regulatory requirements as well as changes to the FCA guidance. Similar to an Advance Notice of Proposed Rulemaking (ANPR) in the US, the consultation seeks industry and public feedback, and is fully expected to lead to formal regulation in the near future.

Some of the key proposed changes are highlighted below:

Changes to substantive requirements

The FCA proposes to increase the current limit (£45) for individual contactless payments to £100 (and potentially to £120).

Currently, where an account information service provider, acting on behalf of a customer, accesses the customer’s account held at another firm (the account holding firm), the account holding firm must re-perform strong customer authentication on the customer every 90 days. The FCA proposes to remove this requirement.

Changes to guidance

The FCA proposes to incorporate various EU guidelines and Q&A into its own guidance. Some of the changes would mark a departure from the current FCA positions. The FCA also proposes to make changes to its guidance on the “limited network exclusion” and the “electronic communication exclusion” which appear to add further clarity.


The consultation closes on 30 April 2021 for all proposals other than the proposed changes to the contactless limits (which closed on 24 February).

For further detail on the FCA consultation, please see our full alert at

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