UK Financial Watchdog Probes PayPal, Visa, and Mastercard Over Competition Concerns

The UK's Financial Conduct Authority (FCA) has launched an investigation into PayPal, Visa, and Mastercard over concerns that digital wallet arrangements may restrict competition. The probe focuses on how PayPal's wallet is funded and used, placing the widely used payment system under regulatory review.

The FCA said it is investigating the firms under Chapter I of the Competition Act 1998 and is also examining Mastercard and Visa under Chapter II. The regulator suspects certain agreements linked to PayPal's digital wallet could limit competition in the UK.

The investigation highlights the payment rails many UK-facing FX and CFD brokers use for client funding. It does not immediately change how traders deposit but signals closer scrutiny of the commercial terms behind these systems and their potential to distort choice or pricing.

PayPal confirmed it received notices of investigation and information requests from the FCA in March 2026, relating to contractual terms with the card networks. The company stated it is cooperating with the investigations.

The FCA has not reached any conclusions or found any breach of competition law. The investigation remains ongoing as the regulator gathers evidence. Under the Competition Act, Chapter I prohibits anti-competitive agreements, while Chapter II bans abuse of a dominant market position.

The outcome is uncertain, but the probe signals increased regulatory scrutiny of digital payment systems and major card networks' role in market access. Many FCA-authorized brokers, including IG, CMC Markets, Pepperstone, and Plus500, support Visa, Mastercard, and often PayPal for client funding.

Notably, other regulators have also scrutinized these payment firms. In the US, the Federal Trade Commission recently sent warning letters to Visa, Mastercard, PayPal, and Stripe against "debanking" customers based on political or religious views. Last year, Visa and Mastercard agreed to a revised $38 billion settlement with US merchants in a long-running swipe-fee antitrust case.