PS25/12: Changes to the safeguarding regime for payments and e-money firms

Read PS25/12 (PDF)[2]

What we are changing

We are strengthening the safeguarding regime to address weaknesses in firms’ current safeguarding practices. This will better protect customers of payments and e-money firms that fail.

The changes will reduce shortfalls in client funds and ensure they are returned to customers as quickly as possible if a firm fails.

They will also make it easier for us to identify and intervene in payment firms that do not meet our safeguarding expectations.

We have also published our intended amendments to 'Payment Services and Electronic Money - Our Approach'[3].

Who this applies to

Our rules apply to all: 

• Authorised payment institutions (except payment institutions which solely provide payment initiation services or account information services).
• Authorised e-money institutions.
• Small e-money institutions.
• Credit unions which issue e-money in the UK.  

Small payment institutions (SPIs) will continue to be able to opt-in to comply with safeguarding requirements (including our rules) if they choose to do so. 

Background

In 2023, the Treasury published its Payment Services Regulations Review and Call for Evidence[4]. Our subsequent consultation (CP24/20[5]) proposed rules and guidance to improve the safeguarding regime and make customer funds safer. Some of the proposed changes depended on legislative change. We consulted on making changes in 2 stages: 

• ‘Interim rules’ (the Supplementary Regime) to encourage greater compliance with existing safeguarding requirements, support more consistent record keeping, and strengthen reporting and monitoring requirements.
• ‘End-state rules’ (the Post-Repeal Regime) to replace the safeguarding requirements of the EMRs and PSRs with a ‘CASS’ style regime.

Next steps

The Supplementary Regime, and related amendments to the Approach Document, will come into force on 7 May 2026.

We will engage with industry to support implementation.