The Financial Conduct Authority (FCA) has issued a warning to nearly 300 payment firms, stating that they must take prompt action to address "unacceptable" risks to consumers and the financial system or face closure.

The FCA's director for payments and digital assets, Matthew Long, commended the competition and innovation in the UK's payments sector, but expressed concerns that many firms lacked robust controls. Common failings highlighted in the letter include inadequate reconciliation processes, a lack of appropriate liquidity risk management, and insufficient measures to combat money laundering, sanctions breaches and fraud. The FCA warned that it would use its full range of supervisory tools and remove or sanction firms that failed to meet its standards.