Sarah Drew, Associate in our Financial Services team provides an update on the recent Policy Note published by the UK Government, outlining its intention to impose new requirements on UK payment service providers where they terminate contracts with customers.
On 14 March 2024, the UK Government published a Policy Note outlining its intention to impose new requirements on UK payment service providers where they terminate contracts with customers. The reforms are addressed to all payment service providers and are aimed at ensuring increased protection for consumers and other users of payment services. They are being introduced in the aftermath of recent high-profile incidents of ‘de-banking’ where termination of bank accounts or payment services were motivated by a customer’s personal or political beliefs.
The reforms seek to reinforce the pre-existing prohibition that customers’ payment services should not be terminated on grounds relating to their lawful freedom of expression.
The new requirements will apply to provider-initiated terminations of framework contracts concluded for an indefinite period and entered on or after the day the statutory instrument comes into force. The key reforms are in respect of:
The intention is for the draft legislation to be put before Parliament this summer and to commence as soon as possible once it has been given the green light.
If you want to know more about the upcoming changes and how these could affect your regulatory obligations as a payment service provider, get in touch with our Financial Services team for more information.