FCA and Modulr agree customer onboarding restrictions
Summary
The FCA has imposed customer onboarding restrictions on payments-as-a-service provider Modulr until the firm comes up to scratch with new regulations.
In early October 2023, the regulator issued a restriction on the company, preventing it bringing onboard new partner clients, such as agents and distributors, to use its payments infrastructure for cards or accounts.
Modulr currently delivers payments infrastructure for more than 200 top-tier customers, including Revolut, Wagestream, Sage and BrightPay, processing an annualised transaction value of more than £100bn.
Modulr says it agreed to temporarily pause the onboarding of certain new customer segments in the UK, due to the many new and revised UK regulations coming into force in 2023 and 2024. These include regulatory changes like the new UK Consumer Duty, adjustments to push payment fraud reimbursement, and a ban on incentive marketing for high-risk assets like crypto.
The firm also said it has been notifying new partners that they might not be able to onboard until the first quarter of 2024.
Links: https://www.finextra.com/newsarticle/43135/fca-and-modulr-agree-customer-onboarding-restrictions