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The UK’s Financial Conduct Authority (FCA) has cancelled Fidelity Payment Services Limited’s registration as a small payment institution (SPI), citing the firm’s failure to conduct any payment activities since its authorisation in 2016.
The revocation took effect last month, following a Final Notice issued by the FCA, after Fidelity failed to refer the matter to the Upper Tribunal within the required 28-day period following a decision notice served on April 2, 2025.
“The Firm has failed to provide payment services since registration,” the FCA said in its statement.
Fidelity, which was registered as an SPI on August 23, 2016, was required to submit annual regulatory returns.
According to the regulator, the firm submitted returns for each year from 2018 through 2024, consistently reporting that it had not carried out any payment transactions or business activity.
Under the Payment Services Regulations 2017 (PSRs), a firm’s registration may be revoked if it does not begin providing services within 12 months of registration, or if it is no longer carrying on the activity for which it is registered.
Following an investigation, the FCA concluded that Fidelity had not offered any payment services in nearly nine years and no longer met the criteria to remain registered.
A sign of a changing FCA
Speaking with Vixio, Cosegic's digital finance consultant Jaspreet Kaur said that the “FCA is using its regulatory tools more than ever.”
“Although it's primarily seen to be a ‘traditional’ conduct regulator, it is increasingly relying on data outputs and using them to probe firms and take action where it is necessary,” she said.
Meanwhile, Colin Darby, managing director at Fintrail, pointed out that the FCA has recently been at pains to highlight its willingness to authorise appropriate new entrants and its support for applicants. “This case reminds us that the FCA is also willing and able to revoke an existing authorisation."
Darby told Vixio that from a regulatory standpoint, it is intriguing to consider how this example aligns with the FCA's 'use it or lose it' approach.
“It's somewhat surprising that the FCA did not intervene sooner, given the clear indicators of inactivity, including the firm's regulatory returns and accounts filed to Companies House”, he said.
According to Darby, the question arises: what led the FCA to act now?
"When the FCA identifies a firm which appears not to be undertaking the activities for which it has approval, it typically engages with the firm to understand the situation,” he said.
“If there’s no credible or achievable plan in place, the regulator will often encourage the firm to cancel its authorisation. If there is a plan, they’ll monitor progress. As this case was a revocation action by the FCA, that throws up the possibility that the firm declined to proceed with cancellation voluntarily."
Kaur added that the introduction of the Consumer Duty, with its wider scope, supports the regulator’s principles for businesses (PRIN) requiring firms to be clear to the FCA about what they are doing and how they are doing it.
“Remember, Principle 11 creates an obligation on Firms to disclose to the FCA appropriately anything relating to the firm of which that regulator would reasonably expect notice,” she said.
“If it could negatively affect consumers on an impactful level, firms should be sure that they have told the FCA.”
What happened to Fidelity?
The revocation could be regarded as a warning by firms, and Fidelity is not the first to have been dealt this fate – in fact, the regulator has revoked the SPI registrations of three firms, Bancoremit Limited, Samsky Pay Ltd, and PayAfrique.com Limited in recent months.
Bancoremit lost its registration in February 2025 after failing to submit required annual returns for three consecutive years and not responding to FCA communications.
Samsky Pay's registration was cancelled at a similar time following a lack of cooperation with the FCA, unresolved customer complaints, and failure to address supervisory concerns.
PayAfrique.com’s registration was revoked on September 19, 2024 for failing to file returns for two years and showing no indication of ongoing payment activity or regulatory compliance.
Bancoremit, which appears to have a presence in Nigeria, and Ghanaian firm PayAfrique both found themselves in a similar situation to Fidelity, albeit with less time having lapsed before the regulator took action.
Although we may never know the full details of what happened, there are several plausible reasons why Fidelity never used its payment services licence and yet failed to cancel it voluntarily.
One possibility is a failure to launch – Fidelity may have faced operational delays or funding issues that prevented it from ever starting its intended payment services.
Alternatively, the firm may have pursued a “licence first” strategy, securing regulatory approval to enhance its credibility while seeking investment or partnerships, but ultimately never moving forward.
From a regulatory or reputational perspective, the firm may have chosen to retain the licence as a contingency, assuming it would be easier to keep it active than to reapply in the future.
Or it may have avoided voluntary cancellation due to concerns about signalling failure, preferring instead to let the authorisation lapse quietly.
In smaller firms especially, there may also be a lack of awareness around the formal cancellation process and the consequences of ongoing non-use, leading to prolonged inaction.
The value of FCA accreditation
Across the world, an FCA licence is widely seen as a mark of credibility and professionalism, making it attractive to investors, partners, and customers.
It signals that a firm has met stringent regulatory standards set by one of the world’s most respected financial regulators, opening up a gateway to other jurisdictions.
Even after Brexit, EU member states such as Lithuania and Malta have adapted many of their guidance and licensing requirements from the FCA.
Authorisation demonstrates that a firm has in place robust governance, risk management, and compliance systems, including in traditionally weaker areas for payment firms such as anti-money laundering (AML) controls and assessments of senior management.
This in turn gives investors greater confidence in the firm's legitimacy and operational integrity.
For early-stage or growth firms, an FCA licence performs the role of a de-risking signal to investors, indicating a readiness to navigate regulatory complexity.
In sectors such as fintech, crypto, or payments, it serves as a trust mark, helping attract clients, partners, and media attention.
However, things do not always work out as planned, and unfortunately for some firms, the approval does have an expiry date if the regulator determines they are not providing anything to consumers and the market.
