Consumer Duty: International payment pricing transparency – good and poor practice
AI Analysis
The FCA's guidance outlines good and poor practices in communicating costs for international money remittance and cross-border payments involving currency conversion, emphasizing transparency under the Consumer Duty to enable informed consumer decisions. It matters because non-compliance risks supervisory action, as the FCA plans future reviews to assess improvements, raising the bar on pricing clarity amid ongoing Duty enforcement.
Key dates
- 31 July 2023
- - Consumer Duty effective date for new and existing products/services
- 1 May 2025
- - FCA publication date of this good/poor practice guidance
Suggested considerations
- Review and update pre-transaction communications (e.g., websites) to prominently display all required pricing elements before commitment: GBP amount, exchange rate/markup, recipient amount, fees (fixed/variable/total), and intermediary warnings.
- Ensure markups are framed as consumer costs, not obscured (e.g., avoid "zero cost" claims despite markups).
- Monitor communication effectiveness regularly under Consumer Duty to confirm good outcomes, enabling cost comparisons and informed choices.
- Apply principles to all channels; proactively disclose fee variability and third-party impacts.
What changed
This is not new rulemaking but illustrative guidance applying existing Consumer Duty rules from FG 22/5 and PRIN 2A.5.3R, which mandate communications that are clear, fair, not misleading, meet retail customers' information needs, are understandable, and support effective decisions. Key emphases include pre-transaction disclosure of: amount remitted (GBP), applied exchange rate (explaining markups as consumer costs), recipient amount (local currency), variable/fixed fees, total fees, and intermediary/recipient bank fees where applicable. Poor practices highlighted: hidden transaction/additional fees, unclear variability, and buried information impeding comparisons.
Compliance impact
Urgency: High – Consumer Duty is live since 2023, but this 2025 guidance signals intensified FCA scrutiny on payments transparency, with planned follow-up work and engagement to enforce improvements. Firms risk remediation demands or enforcement if disclosures remain inadequate, especially as it targets common weaknesses like hidden fees amid broader Duty portfolio reviews.
Who is affected
Related regulations
References
AI-generated analysis. May contain errors or omissions — verify with the original FCA source before acting. Full disclaimer.
What the FCA said
Good and poor practice
Published by FCA . Read the full notice at the source for the authoritative text.