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Dear CEO/Director | Release Date: 21st February 2023

To read a shorter summary of this Dear CEO/Director letter, click here.

To access the original FCA document, click here

Long Summary

The Financial Conduct Authority (FCA) is focusing on a substantial shift in expectations towards an outcomes-focused approach for consumer protection, significantly heightening the standard of care that payment firms must provide. This change is encapsulated in the newly introduced Consumer Duty, targeting firms under the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011 (EMRs).

Implementation Urgency

Recognising the complexity and timing of these changes, especially during economically challenging times, the FCA insists that the integration of the Consumer Duty will facilitate trust and growth in the sector, ensuring firms deliver consistent positive outcomes for consumers.

Implementation Timeline

End of October 2022: Firms are expected to have their implementation plans ratified by their boards.

End of April 2023: Necessary reviews by manufacturers should be completed to comply with the outcome rules.

31 July 2023: The Duty becomes applicable to all new and ongoing products or services available for sale or renewal.

31 July 2024: The Duty extends to products or services that are closed.

Applicability to Payment Firms

The Duty targets a broad spectrum of financial activities, covering entities like Payment Institutions (PIs), Electronic Money Institutions (EMIs), and Registered Account Information Service Providers (RAISPs). It applies not only to direct consumer relationships but also to entities that significantly influence consumer outcomes, including micro-enterprises and small charities.

Requirements Under the Duty

Outlined in the July 2022 Finalised Guidance, the Consumer Duty mandates:

Expectations for Firm Integration

Firms are expected to weave the Consumer Duty deeply into their corporate culture and business operations:

Leadership Engagement: Firm leaders must prioritise and integrate consumer interests into the firm’s core mission and operations.

Strategic Alignment: The Duty should be central to the firm’s strategic objectives, ensuring it informs all business decisions.

Feedback from Implementation Plan Reviews

As of January 25, the FCA provided feedback on the firms’ implementation plans, noting both commendable practices and areas needing improvement. While many firms have adapted well, some lag behind, risking inadequate preparation by the set deadlines.

Focused Areas for Compliance

Effective Prioritisation: Firms need to prioritise actions based on their potential impact on consumer outcomes.

Deep Integration: Beyond superficial compliance, firms should thoroughly integrate the Duty’s requirements.

Collaborative Compliance: Firms must work together within the distribution chain to ensure cohesive adherence to the Duty.

Supervisory Approach and Forward Strategy

The Consumer Duty forms a cornerstone of the FCA’s three-year strategy, influencing supervision and regulatory focus until 2025. It necessitates a proactive supervisory approach, emphasising ongoing interactions with firms to ensure compliance and address emerging market challenges.


The implementation of the Consumer Duty within payment firms is crucial for enhancing consumer protections and ensuring the sector’s robust growth. By embedding these standards deeply into their operational and strategic frameworks, payment firms can significantly contribute to a more trustworthy and consumer-oriented financial market.

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