Application of the Consumer Duty to the payments and e-money sector

Push-back during the consultation aside, the FCA has clarified that the Consumer Duty does apply to payment services and e-money firms. Drawing attention to areas already receiving scrutiny, particularly where rapid growth of the industry is driving regulatory scrutiny around customer outcome impacts, guidance emphasises the importance of all products and services being fit for purpose and designed to fit the needs of a target group of customers.

The FCA anticipates that the rules generally apply at the level of the target market rather than a firm’s services for an individual customer (unless a bespoke service is developed).

The guidance in FG22/5 explicitly references payments and e-money distribution chain scenarios to identify the roles and interactions of firms across their interactions.Fair value rules sit on top of and alongside payments and e-money disclosure requirements. Firms must engage in the spirit of the Duty’s requirements, and not simply pursue a box ticking exercise.