Registering as a Payment Services Agent with the FCA

What a payment services agent is

An agent is any person who acts on behalf of a payment institution, e-money institution, or registered account information service provider (the principal) in the provision of payment services. That definition comes from regulation 2 of the Payment Services Regulations 2017 and, for e-money firms, regulation 2 of the Electronic Money Regulations 2011. The FCA's approach document confirms that all payment and e-money firms may provide payment services in the UK through agents, as long as they register them with the FCA first.

The point that catches firms out is timing. Under regulation 34, an authorised payment institution, a small payment institution, or a registered account information service provider may not provide payment services in the United Kingdom through an agent unless the agent is included on the register. The agent has no standing to provide the service until the FCA has entered it. There is no informal or provisional route: registration is the gate.

A distributor is not the same thing. For e-money, a person who simply loads or redeems e-money on behalf of an institution is, in the FCA's view, a distributor rather than an agent. Distributors cannot provide payment services and, unlike agents, do not have to be registered with the FCA, although the institution must still tell the FCA about its proposed use of them.

The distinction matters commercially as well as legally. Regulation 33 of the Electronic Money Regulations 2011 confirms that an e-money institution may distribute or redeem e-money through an agent or a distributor, but may not issue e-money through either. So the model you choose depends on the activity. If a third party will actually provide a payment service in your name, it is an agent and must be registered. If it only loads or redeems e-money, it is a distributor and the registration requirement does not apply, though the FCA still expects to know it exists.

The legal requirement under regulation 34

Regulation 34 of the Payment Services Regulations 2017 is the operative provision. It states that the named institutions may not provide payment services through an agent unless the agent is on the register, and it lists the information an application must contain. The Electronic Money Regulations 2011 contain an equivalent requirement for e-money agents, and the FCA administers both in the same way.

The regulation also builds in ongoing duties. The principal must ensure that agents acting on its behalf inform payment service users of the agency arrangement, so customers know who they are really dealing with. And the principal must notify the FCA without undue delay if there is any change in the information it originally provided about the agent. The register is meant to stay current, not to capture a single snapshot.

The FCA does not have to accept every application. The Payment Services Regulations 2017 and the Electronic Money Regulations 2011 only allow the FCA to refuse to include an agent where it has not received all the required information or is not satisfied it is correct, where it is not satisfied the agent's directors and managers are fit and proper, or where it has reasonable grounds to suspect money laundering or terrorist financing in connection with the agent.

Information the FCA requires

The application must give the FCA a clear picture of who the agent is and how it will operate. The list in regulation 34, reproduced in the FCA approach document, is specific. Missing items are a common cause of delay, because the FCA can refuse where it has not received all the information required.

Where the agent is not itself a payment service provider, you must also supply the identity of its directors and the persons responsible for its management, together with evidence that they are fit and proper persons. That evidence is your work, not the FCA's: the checks fall to you as principal before you apply.

The anti-money laundering description is worth particular attention. You need to set out the internal control mechanisms the agent will use to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The FCA can refuse to register an agent where it has reasonable grounds to suspect that money laundering or terrorist financing is taking place, has taken place, or has been attempted in connection with the agent, or that the arrangement could increase that risk. A thin or generic AML description invites questions and delay, so treat this section as a substantive part of the application rather than a formality.

How to register an agent, step by step

Once your firm is authorised or registered, you register agents through the FCA's Connect system. The FCA is required to make a decision on a complete application to register an agent within two months of receiving it, where the agent is engaged in relation to payment services or e-money issuance in the UK. Where an agent is proposed at the same time as your own authorisation, the agent application is determined on the timetable for that authorisation instead.

When the FCA approves an agent application, it updates the Financial Services Register, usually within one business day, and confirms the result to you. Until the agent appears on the register, it cannot provide payment services on your behalf. If it does not appear after two months, the FCA advises contacting its Customer Contact Centre rather than starting work.

Two operational points are easy to miss. First, the two-month clock runs from a complete application, so an application missing any of the required information does not start the timer and can be refused on that basis alone. Getting the pack right first time is faster than correcting it later. Second, if you did not mention agents when you were first authorised or registered, you may need to notify the FCA separately before adding them, and any conditions on your permission that restrict agent use will need to be addressed. Plan the registration into your launch timeline rather than treating it as a same-week task.

Your responsibility for the agent

Registration does not transfer risk to the agent. Regulation 36(2) of the Payment Services Regulations 2017, and regulation 36(2) of the Electronic Money Regulations 2011, confirm that the principal is responsible for anything done or omitted by an agent, to the same extent as if the principal had expressly permitted the act or omission. In plain terms, the agent's conduct is treated as your conduct.

Because of that, the FCA expects you to have appropriate systems and controls in place to oversee your agents' activities effectively. That includes the fit and proper checks on the agent's management before you apply, and ongoing oversight afterwards. You must also tell the FCA without undue delay about significant changes in the fitness and propriety of an agent's management, or anything relating to money laundering or terrorist financing.

For firms weighing whether the agent route fits their model, our authorisation service helps you structure the application and the oversight framework the FCA expects to see.

Agent versus appointed representative

The payment services agent regime is sometimes confused with the appointed representative regime under section 39 of the Financial Services and Markets Act 2000. They are different frameworks. An appointed representative is exempt from the general prohibition because an authorised principal has accepted responsibility in writing for its regulated business under a written contract, and under section 39(3) the principal is responsible for anything done or omitted by the representative. That covers regulated activities under FSMA, such as credit broking or insurance distribution.

A payment services agent, by contrast, is registered under the Payment Services Regulations 2017 for payment services, a distinct regime with its own registration process rather than a FSMA contractual appointment. A payment institution that also holds other permissions might use both models: agents under the PSRs 2017 for its payment services, and appointed representatives under FSMA for any other regulated activities it is responsible for. The two do not overlap, and one does not substitute for the other.

The common thread is principal liability. In both regimes the principal answers for the conduct of the person acting on its behalf. What differs is the legal basis, the activities covered, and the mechanics of appointment.

Conclusion

Registering a payment services agent is a defined, front-loaded process. You run the fitness checks, gather the information regulation 34 requires, apply through Connect, and wait for the FCA to enter the agent on the register within two months of a complete application. The agent cannot start until that entry is made, so building the registration timeline into your commercial plan matters.

What does not change is your responsibility. Under regulation 36(2) of the PSRs 2017 the agent's conduct is your conduct, and the FCA expects the systems and controls to match. That accountability is the same principle that sits behind the appointed representative regime, even though the two frameworks are legally distinct. If you are planning to grow through agents, treat the registration as the start of an oversight obligation, not the end of one. Our payments authorisation team can help you get both the application and the controls right.

Frequently asked questions