OpenLegislation

Explanatory note

Original text. Later amendments are not shown.

(This note is not part of the Regulations)

These Regulations amend regulation 51 of the Payment Services Regulations 2017 (“PSRs”) to impose new requirements on payment service providers (“PSPs”) in relation to the termination of framework contracts for payment services concluded for an indefinite period and entered into on or after 28th April 2026.

Regulation 3 substitutes regulation 51 of the PSRs with new regulation 51 and new regulations 51A to 51D.

Regulation 51 restates the requirements that apply to all framework contracts, regardless of when they were entered into.

Regulation 51A restates the notice requirements that apply to framework contracts concluded for an indefinite period and entered into before 28th April 2026.

Regulation 51B provides new notice requirements applying to framework contracts concluded for an indefinite period and entered into on or after 28th April 2026. The requirements include the following—

  • PSPs must give 90 days’ instead of two months’ notice before the termination of a contract takes effect;

  • the termination notice must also contain certain information, including an explanation of the reasons for termination which is sufficiently detailed and specific to enable the payment service user to understand why the framework contract is being terminated.

Regulation 51B(4) provides that in the event of a conflict between the requirements in regulation 51B and another legal requirement to which the PSP is subject, the other legal requirement prevails to the extent of the conflict.

Regulations 51C and 51D provide specific exceptions or modifications to the requirements in regulation 51B.

Regulation 51(6) provides that discharge by agreement may not be relied upon to avoid the new contract termination requirements in regulations 51B and 51D(1)(b).

Regulation 2 makes amendments to regulations 25 and 26 of the Payment Accounts Regulations 2015 mainly to bring the notice period and requirements to give reasons in line with the new requirements in the PSRs for contracts entered into on or after 28th April 2026.

The other amendments made in these Regulations are consequential to the substitution of regulation 51 of the PSRs described above.

A full impact assessment of the effect that this instrument will have on the costs of business, the voluntary sector and the public sector is available from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and is published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk.