FCA and Modulr Agree on Customer Onboarding Restrictions amid Regulatory Changes

<p>The
UK's Financial Conduct Authority (FCA) and payments-as-a-Service provider Modulr have agreed on customer onboarding
restrictions amid new
regulations. </p><p>FCA Imposes Customer Onboarding
Restrictions on Modulr</p><p>Modulr,
a company in the payments infrastructure sector, serves over 200 clients,
including Revolut, Wagestream, Sage, and BrightPay. It currently processes an
annualized transaction value exceeding £100 billion.</p><p>The
FCA restriction, issued at the start of October 2023, has prevented Modulr from
onboarding new partner clients using its payments infrastructure for cards or
accounts.</p><p>In
response to the regulatory changes taking effect in the UK during 2023 and
2024, including the new UK consumer duty, adjustments to push payment fraud
reimbursement, and a ban on incentive marketing for high-risk assets like
cryptocurrencies, Modulr has decided to temporarily pause onboarding certain
customer segments in the <a href="https://www.financemagnates.com/tag/uk/">UK</a>.</p><p>The
company has begun notifying new partners of the delay, with expectations that
onboarding may not resume until the first quarter of 2024. Modulr has not
officially commented on the exact deadline.</p><p>FCA Investigates
Revolut over Suspicious Account Withdrawals</p><p><a href="https://www.financemagnates.com/">Finance Magnates</a>
reported earlier that the <a href="https://www.financemagnates.com/fintech/revolut-under-scrutiny-fca-probes-suspicious-account-transactions/">FCA
was investigating Revolut over allegations of allowing funds to be withdrawn</a>
from accounts flagged as suspicious by the National Crime Agency. </p><p>An estimated £1.7 million was reportedly released from such
accounts between July and August. Revolut informed the <a href="https://www.financemagnates.com/tag/fca/">FCA</a>, but it disputed the
amount, stating only £500,000 was involved. That added to Revolut's regulatory
challenges as it awaited a UK banking license applied for in January 2021.</p><p>Concerns over auditing, compliance, and corporate culture
within Revolut have arisen during the licensing process. Revolut operates as a
payment institution in the UK and has expanded services internationally,
including in the US. </p><p>Its quest for a US banking license has faced delays, with
regulatory authorities indicating no pending applications. A spokesperson from
Revolut declined to comment on the license application's status.</p>

This article was written by Tareq Sikder at www.financemagnates.com.