The ban on onboarding customers of Modulr, a UK-based embedded payments provider, imposed by the FCA in October 2024 has been lifted.

Modulr, which holds an EMI license and is backed by PayPal, provides payment services for companies such as Revolut, Sage and Ripple. By using its technology, its clients bypass the need to build their own payment infrastructure, are regulated and run a payment network.

If Modulr decides to take on new customers after the ban, it must give the FCA 10 days’ notice.

How the ban came into effect

In October 2024, the Financial Conduct Authority (FCA) told Modulr to stop onboarding new customers due to regulatory concerns. More specifically, the ban meant it could not onboard new ‘partner’ customers, namely ‘agents and distributors’, who use its card or account payment services.

The move came amid regulatory changes, including new rules on consumer protection in financial services and new rules on push payment fraud. However, the temporary ban has since been lifted.

According to the FCA, Modulr has agreed with the Authority that it will not onboard any new agent and/or distributor without giving the Authority at least 10 working days’ written notice.

Modulr said that following the pause, they have made improvements to their Agent & Distributor (A&D) partner onboarding and oversight processes. Having implemented these changes, and having conducted extensive internal and external testing and assurance, they have agreed with the UK Financial Conduct Authority (FCA) to resume onboarding new A&D partners, subject to prior notice to each A&D partner.