David Hamilton on how the UK’s new debanking rules reshape financial services risk management
- This article considers the intentions and implications of the Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025.
- There are two principal changes to the existing Payment Services Regulations framework: the notice period payment firms must give customers prior to terminating services, and the explanations payment firms must give customers for their decisions to terminate services.
- The compliance requirements on payment firms include customer onboarding and risk assessments, maintaining detailed records and training provisions.
On 28 April 2025, the UK government introduced a draft statutory instrument titled the Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 (the amended PSPA Regulations). Despite the prosaic title, the amended PSPA Regulations (if passed) have potentially significant implications for how firms terminate the provision of payment services, commonly referred to as ‘debanking’.
Since Nigel Farage’s public spat with Coutts Bank in 2023, the issue of debanking has drawn sustained public, political and regulatory scrutiny, becoming emblematic of broader concerns around financial exclusion and institutional accountability. Scheduled
