Payment Institutions

Consumer Duty Outcomes Monitoring: How the FCA Is Testing Payment Firms in 2026

Published March 2026 · Last reviewed 19 October 2026 · 7 min read

Key takeaways

  • The Consumer Duty applies to payment and e-money firms' retail business, alongside the payment services conduct rules.
  • The four outcomes are products and services, price and value, consumer understanding and consumer support.
  • The board must review and approve a report on customer outcomes at least once a year (PRIN 2A.8.4R).
  • The FCA's 2026 payments priorities ask firms to close Duty gaps immediately, with a focus on international payment pricing and vulnerable customers.
  • Good practice shows the total cost of a transfer, including any exchange rate mark-up, before the customer commits.

Consumer Duty outcomes monitoring means a payment or e-money firm collects data that shows whether its retail customers are actually getting good results across the Duty's four outcomes, acts on what it finds and reports to its board at least once a year. In 2026 the FCA's payments priorities ask firms to close any gaps immediately, with particular attention to international payment pricing and customers in vulnerable circumstances. This article explains what to monitor, how the FCA tests it and how to report it.

The FCA's Outcomes Testing Approach

The FCA has been clear that Consumer Duty compliance is not about having policies and procedures in place: it is about demonstrating that those policies deliver good outcomes for customers in practice. The regulator is using multiple supervisory tools to assess outcomes:

Data-driven analysis. The FCA uses firms' complaints data and can require further information under section 165 FSMA. Firms should be able to produce outcome data, such as complaint volumes and resolution times, fees and charges by customer group and journey completion rates, quickly when asked.

Multi-firm reviews. The FCA publishes good and poor practice from reviews across firms. For payments, its review of international payment pricing transparency, published on 1 May 2025, is the main benchmark.

Mystery shopping. The FCA can use mystery shopping to test the real customer experience, such as the clarity of fee disclosures and the ease of making a complaint.

The Four Outcome Areas for Payment Firms

Products and services. Payment products and services must be designed to meet the needs of the target market. The FCA expects firms to conduct regular product reviews, assessing whether products continue to meet customer needs and whether any features cause foreseeable harm.

Price and value. The total price paid by customers, including fees, charges, exchange rate mark-ups and any other costs, must be reasonable relative to the benefits. For payment institutions, this means scrutinising exchange rate mark-ups on international transfers, transaction fees, account charges and any penalty fees.

Consumer understanding. Communications must enable customers to make informed decisions. The FCA's May 2025 review found poor practice where firms described transfers as "zero cost" while charging a mark-up, or did not show the full cost. Good practice shows the amount sent, the exchange rate, all fees, the total cost in pounds and the amount the recipient will receive, before the customer commits.

Consumer support. Support must be accessible, responsive and effective. For payment services complaints, the final response is due within 15 business days, or 35 in exceptional cases (DISP 1.6.2A).

OutcomeExample measures
Products and servicesTake-up by target market, product reviews, unexpected harm
Price and valueTotal cost by customer group, exchange rate mark-up, penalty fees
Consumer understandingPre-transaction cost display, drop-off rates, communication testing
Consumer supportComplaint volumes and response times, contact channels, outcomes for vulnerable customers

Common Compliance Gaps in Payment Firms

The FCA has identified several recurring issues in payment firms:

  1. Superficial fair value assessments. Firms that compare their pricing to competitors without analysing whether the total cost is proportionate to the benefits delivered.
  2. Inadequate monitoring frameworks. Firms that have no systematic process for collecting and analysing customer outcome data.
  3. Reactive complaints handling. Firms that address individual complaints without analysing root causes or taking systemic corrective action.
  4. Opaque fee structures. Firms where the true cost of a transaction is not clearly disclosed before the customer commits.
  5. Digital-only support. Firms that offer no alternative support channels for customers unable to use digital platforms.

Building an Effective Outcomes Monitoring Framework

An effective Consumer Duty outcomes monitoring framework for payment firms should include:

  • Regular data collection on key outcome indicators (complaint volumes, resolution times, NPS scores, fee income analysis by customer segment)
  • An annual board report on customer outcomes, which PRIN 2A.8.4R requires, supported by more frequent management information (quarterly is common)
  • Annual product reviews assessing whether products continue to meet target market needs
  • Fair value assessments updated annually or following material changes to pricing
  • Root cause analysis for complaint themes, with evidence of corrective action
  • Customer journey testing to verify that communications are clear and not misleading

What Firms Should Do Now

  1. Review your Consumer Duty monitoring framework: is it collecting the right data and reporting to the board at the right frequency?
  2. Conduct a fair value assessment across all products and services, documenting the methodology and conclusions.
  3. Analyse complaint data for themes and root causes: implement corrective action where patterns emerge.
  4. Test your customer journey from onboarding to transaction completion: is the fee disclosure clear and timely?
  5. Prepare for FCA data requests by ensuring your systems can extract customer outcome data efficiently.

Firms applying for a UK electronic money institution licence or UK authorised payment institution licence should build this monitoring framework into their application, as the FCA expects it from day one.

Regulatory Counsel advises payment firms on Consumer Duty compliance, outcomes monitoring frameworks and fair value assessments. Contact us for a written proposal.

Frequently asked questions

Through complaints and other data, information requests under section 165 FSMA, reviews across firms with published good and poor practice, and mystery shopping. Its 2026 payments priorities say it will take action against firms that do not close gaps.

Products and services, price and value, consumer understanding and consumer support.

Superficial fair value assessments that compare pricing to competitors without analysing whether total costs are proportionate to benefits delivered.

PRIN 2A.8.4R requires the board to review and approve a report on customer outcomes at least once a year. Many payment firms with high customer volumes also give the board quarterly management information.

Yes, for their retail customers. PRIN 3.1.1A applies the Principles to e-money and payment institutions. PRIN 3.1.8 notes the Duty does not override the specific payment services and e-money conduct rules, so firms must meet both.

Following the FCA's May 2025 good and poor practice, show the amount sent in pounds, the exchange rate, all fees, the total cost in pounds including any mark-up, and the amount the recipient receives, before the customer commits. Do not call a transfer "free" if a mark-up applies.

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