Posted: 22 Feb. 2018 5 min. read

Telcos and the PSD2 Exclusion – what next?

While businesses around the world are busy getting ready for GDPR, another wide-reaching EU regulation crept up and took many outside the Financial Services industry by surprise in January 2018 – the Payment Services Directive 2 (PSD2). 


PSD2 removes the previous easy-to-use exemption for electronic communications providers. Instead, it introduces a much more limited exclusion – and if they want to exercise it, they must provide an annual independent audit opinion relating to it. If they are unable to use the new exemption, they may need a full Financial Conduct Authority (FCA) licence as a payment institution.

Most telcos seem to have concluded that the application and compliance costs of a full licence outweigh the benefits, as many have opted for the electronic communications exclusion (ECE) for now. There is recognition, however, that this may be a holding position until there is greater clarity around what will be covered in practice and what the FCA will expect.

Read more about PSD2 and next steps in our briefing  here.

Key contact

Ros Baston

Ros Baston


Ros leads our newly-founded Centre for Corporate Regulatory Insight and specialises in making practical sense of untested legislation. Before joining Deloitte, she spent 15 years as a solicitor working at City firms, in-house at a FTSE 250 company and leading an advice and guidance team at a regulator.