E-money account operators urged to assess whether they are subject to new Payment Account Regulations

The regulator has published a new policy statement and guidance (79-page / 1.34MB PDF) to accompany provisions in the Payment Account Regulations (PARs), finalised last year, which take effect on 18 September.

The PARs, among other things, impose obligations in relation to the disclosure of fees that apply to payment accounts, as well as a requirement to enable account switching. The regulations also require account providers to notify consumers if it is possible to buy a payment account on its own, separate from a broader package they might offer which includes other products and services.

Not all payment accounts will fall within the scope of the new regulations. However, the FCA confirmed that some electronic money (e-money) institutions might be subject to the new regime. It said it would depend on whether an e-money account "offers all the functionalities" of a 'payment account' as defined under the regulations and is also "used for day-to-day payment transactions".

The FCA said: "Such an account would be likely to meet the definition of a ‘payment account’ if it is marketed as an alternative to a current account, and is also used by consumers in a similar way to a current account, for example to pay household bills and receive regular payments such as wages, salary or benefits."

A 'payment account', for the purposes of the regulations, is defined as "an account held in the name of one or more consumers through which consumers are able to place funds, withdraw cash and execute and receive payment transactions to and from third parties, including the execution of credit transfers, but does not include any of the following types of account provided that the account is not used for day-today payment transactions: savings accounts; credit card accounts where funds are usually paid in for the sole purpose of repaying a credit card debt; current account mortgages or e-money accounts".

The FCA said that all payment service providers (PSPs) should assess the accounts they offer to determine whether they meet the criteria that would place them subject to the PARs. The firms must also make those assessments every time they introduce a new account or change the functionalities of their accounts.

The regulator also said that ongoing assessment should also be made to check whether payment accounts they offer become subject to the PARs because of "changing consumer use and any other factors relevant to the definition of a ‘payment account’". Those ongoing assessments should be carried out at "appropriate intervals". The FCA it is for PSPs to determine how regularly their assessments should take place.