The UK’s Financial Conduct Authority (FCA) has placed restricted activity measures on the embedded payments company regarding onboarding new customer segments.
According to a notice on the FCA website, the firm has agreed with the regulator that it will not without its prior written consent on-board any new agent and/or distributor.
Existing agents and/or distributors will for now be the only ones permitted to distribute and/or redeem e-money or provide payment services on behalf of the firm, the FCA said.
“With many new and revised UK regulations coming into force in 2023 and 2024, we have agreed to temporarily pause onboarding certain new customer segments in the UK, specifically agents and distributors,” a spokesperson for Modulr told Vixio when approached for comment.
New regulations referenced by the company include the Consumer Duty, which came into force at the end of July 2023.
“This increases the duty of care we and our SME and consumer-facing customers now have to end customers,” said the spokesperson.
In addition, the spokesperson mentioned the upcoming authorised push payment (APP) fraud mandatory reimbursement model, which comes into force in 2024, and the application of the Financial Promotions Requirements to high-risk assets and digital assets, including an extension to the ban on incentive marketing.
“We are responsible for monitoring our customers’ adherence to all regulations and we continue to take this very seriously,” said the spokesperson.
There is no impact on existing customers or their ability to onboard new customers, the firm told Vixio. However, it also said that customers are being kept informed.
Further, the company said that there is no impact on existing or new direct customer businesses or on growing European operations.
“We are building a truly world-leading business, and in close partnership with the FCA, we are continuing to invest in our systems and processes, consistent with our scaling ambitions,” the spokesperson said.
In July, the company revealed that it had received regulatory and branch registration approvals from Banque de France and Banco de España.
The company has grown fast since 2016 and its audited 2022 financial statements show that it grew revenue by 80 percent year-on-year to £31m, and its spokesperson told Vixio that the company will end 2023 at a substantially higher run rate.
The company additionally raised $108m in Series C funding in April 2022.