On 2 October 2023, HM Treasury published a Policy Statement ‘Payment service contract termination rule changes: Implementation, timings and next steps’.

On 21 July 2023, the Treasury published a Policy Statement on payment service contract termination rules and freedom of expression, setting out the government’s plans to enhance requirements relating to the process and conduct requirements placed on providers of payment services in cases of framework contract termination.

The changes include extending the notice period for termination of a framework contract from two months to 90 days and mandating that providers give a clear and tailored reason for termination. Both requirements are subject to limited exceptions, including if to do so would be unlawful.

This latest Policy Statement is intended to provide additional clarity on the implementation of these reforms: their intended scope; the government’s expectations for how these reforms should apply to payment service framework contracts in practice, and when the government intends to introduce the legislation to underpin these reforms.

The government intends to deliver the secondary legislation to implement these reforms as a priority and is therefore planning to publish a draft statutory instrument by the end of 2023 and make the relevant amendments to the legislation subject to Parliamentary approval as soon as Parliamentary time allows.