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Assessing payment and e-money firm compliance

Now that the FCA has strengthened its safeguarding regime, auditors have a lot to consider when providing reports for payment and e-money firms. John Mongelard answers your questions.

Both the fintech boom and the pandemic have increased business and consumer use of non-bank payment and e-money firms for transactional banking services. However, in June 2020 Wirecard AG demonstrated what can happen to customer funds that are not appropriately safeguarded in the event of a payment firm becoming insolvent. To prevent this from happening in the future, the UK’s Financial Conduct Authority (FCA) strengthened its safeguarding regime.

Since July 2019, non-bank payment and e-money firms have been required to attest to the FCA that they have (or have not) met the requirements for safeguarding service users’ funds in the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011 (EMRs).