FCA said that it has found ‘material issues’ with crime-controlling measures in some payment firms. Credit: Luis Villasmil on Unsplash.

The UK Financial Conduct Authority (FCA) has observed that majority of the payments firms in the country do not have proper control frameworks.

Lack of controls has exposed customers and the country’s financial system to ‘unacceptable risk’, warned the watchdog.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

In a letter addressed to the heads of electronic-money and payments institutions, the FCA said that it has found various ‘material issues’ with crime-controlling measures and ‘elevated fraud rates’ in some of the companies.

The regulator threatened to remove or sanction the firms that fail to meet authorisation norms or its standards.

FCA wrote in the letter: “We welcome the competition and innovation we have seen in the payments sector and the improved choice, convenience and value this can provide for customers.

“However, we remain concerned that many payments firms do not have sufficiently robust controls and that as a result some firms present an unacceptable risk of harm to their customers and to financial system integrity.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“We consider that the risk of customer harm is heightened by the tightening economic conditions and the cost-of-living crisis.”

Over the last few weeks, the payment industry has been witnessing crackdowns in Lithuania where organisations linked to FCA-regulated payments firms are involved, reported Bloomberg.

Last month, Lithuania’s central bank barred a Railsbank Technology unit from onboarding new clients as it found ‘reason to suspect that the institution is grossly and systematically’ flouting regulations related to money laundering and terrorist financing.