MEMA Scope · Assessment
Do marketplaces handling payments need FCA authorisation?
An online marketplace or platform collects payment from buyers and pays sellers or service providers, sometimes after holding the funds. Review the initial view below and answer a few questions to refine it.
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Outcome depends on the detail
Handling buyer and seller payments may be a payment service
Whether a marketplace needs authorisation depends on whether it handles funds and whether a commercial agent or other exclusion applies.
Route to consider: Depends on facts we still need
Why this was flagged
- 1Collecting a buyer’s money and paying a seller can be money remittance or another payment service.
- 2Platforms often hold funds between payment and release, which brings safeguarding questions.
Questions still to resolve
Answer to refine the view. The result updates as you go.
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Do you act as agent for only the buyer or only the seller, with authority to negotiate or conclude the sale on their behalf?
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Do you use an authorised payment provider to collect and pay out funds, so money never sits in your own accounts?
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Do you hold sellers’ or buyers’ funds in your own accounts before paying out?
Regulatory basis to examine
Your next steps
- 1Map who is the agent of whom and who holds the funds at each step
- 2Test the commercial agent exclusion against the actual contracts
- 3Consider integrating a regulated payment provider
- 4If you hold funds, plan safeguarding and authorisation
Where applications for this model most often fall short
- Contracts showing authority of the platform to negotiate or conclude sales
- A flow of funds diagram
- Terms and conditions that describe the payment role accurately
This is an initial indication from published FCA material, not an FCA determination or legal advice.
If authorisation is required, check the firm’s governance, policies, resources and application preparedness.
MEMA Scope gives an initial view from published FCA material. It is not legal advice or an FCA determination. Automatic matching and typed questions use AI only to choose a profile and to answer from vetted guidance; the assessment itself is never written by AI.
About this business model
An online marketplace or platform collects payment from buyers and pays sellers or service providers, sometimes after holding the funds.
Whether a marketplace needs authorisation depends on whether it handles funds and whether a commercial agent or other exclusion applies.
This page gives an initial view from published FCA and legislation sources. It is not an FCA determination or legal advice. Not your business model? Describe your business in MEMA Scope.
Marketplace or platform handling payments between buyers and sellers: frequently asked questions
Do marketplaces need a payments licence?
A marketplace may need authorisation if it handles funds between buyers and sellers, unless an exclusion such as the commercial agent exclusion applies or a regulated partner holds the funds.
What is the commercial agent exclusion?
It is an exclusion in Schedule 1 Part 2 of the PSRs for payments from a payer to a payee through a commercial agent authorised to negotiate or conclude the sale for only one of them. Its limits are discussed in PERG 15.
What could change the answer for marketplaces handling payments?
Whether a marketplace needs authorisation depends on whether it handles funds and whether a commercial agent or other exclusion applies. It can change depending on the answers to questions such as: Do you act as agent for only the buyer or only the seller, with authority to negotiate or conclude the sale on their behalf? Do you use an authorised payment provider to collect and pay out funds, so money never sits in your own accounts? Do you hold sellers’ or buyers’ funds in your own accounts before paying out?
Which FCA rules should marketplaces handling payments look at first?
Start with: Payment services and commercial agent exclusion; Perimeter guidance on the PSRs; FCA: payment institution applicants. This is an initial view from published FCA material, not an FCA determination.
What are the first steps for marketplaces handling payments?
Map who is the agent of whom and who holds the funds at each step. Test the commercial agent exclusion against the actual contracts. Consider integrating a regulated payment provider. If you hold funds, plan safeguarding and authorisation.
Businesses we check
MEMA Scope covers 32 common business models. Each page explains whether that kind of business may need FCA authorisation, the rules to look at and the routes to consider.
Consumer credit
- Do car dealers offering finance need FCA authorisation?
- Do motor finance brokers need FCA authorisation?
- Do retailers offering buy now pay later need FCA authorisation?
- Do consumer lenders need FCA authorisation?
- Do debt collectors and debt administrators need FCA authorisation?
- Do debt management and debt advice firms need FCA authorisation?
- Do credit lead generators and comparison sites need FCA authorisation?
- Do rent-to-own and vehicle leasing providers need FCA authorisation?
- Do credit brokers introducing customers to lenders need FCA authorisation?
Payments and e-money
- Do payments apps and payment processors need FCA authorisation?
- Do small payment institutions need FCA authorisation?
- Do e-money issuers and digital wallets need FCA authorisation?
- Do agents of payment institutions need FCA authorisation?
- Do open banking providers need FCA authorisation?
- Do money transfer and remittance businesses need FCA authorisation?
Insurance
Mortgages
Investments and wealth
- Do financial advisers need FCA authorisation?
- Do discretionary investment managers need FCA authorisation?
- Do investment platforms and wealth-tech firms need FCA authorisation?
- Do crowdfunding and peer-to-peer lending platforms need FCA authorisation?
- Do corporate finance boutiques need FCA authorisation?
Other regulated activities
- Do claims management companies need FCA authorisation?
- Do funeral plan providers and sellers need FCA authorisation?
- Do introducers and referral partners need FCA authorisation?
- Do international firms entering the UK need FCA authorisation?
- Do accountants and solicitors giving financial advice need FCA authorisation?
Want a consultant to look at your facts?
Book a free scoping call and we will map the permissions, evidence and timeline for your firm.
Phone: 0330 133 0811
Email: contact@memaconsultants.com