The Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 (SI 2025/688) took effect on April 28, 2026. The regulations amend the Payment Services Regulations 2017, imposing new requirements on payment service providers when terminating framework contracts for payment services. PSPs must now provide customers with at least 90 days' notice before closing an account or ending a payment service contract. This replaces the previous two-month minimum under the 2017 regulations.
PSPs must also provide a clear, specific written explanation for the termination decision. The explanation must enable customers to understand the rationale and, where appropriate, challenge it through the Financial Ombudsman Service. The obligation originated from the Financial Conduct Authority's 2023 review of bank account closure decisions, which found that consumers and small businesses were frequently given inadequate notice and insufficient justification.
The new requirements apply only to framework contracts entered into on or after April 28, 2026. PSPs terminating contracts concluded before this date remain subject to the existing two-month notice period. The regulations preserve an exception for financial crime cases, where firms are not required to disclose specific reasons for termination if financial crime is suspected.