The UK's Financial Conduct Authority (FCA) has opened a competition investigation into PayPal, Visa and Mastercard, focusing on whether certain digital wallet arrangements may restrict competition in the UK. The probe places one of the most widely used online payment systems, PayPal, and two major card networks under regulatory review.
The FCA stated that it is investigating Mastercard, PayPal and Visa under Chapter I of the Competition Act 1998, which prohibits agreements that prevent, restrict or distort competition. In addition, the regulator is examining Mastercard and Visa under Chapter II of the same law, which bans the abuse of a dominant market position.
Scope and focus of the investigation
The investigation centres on how PayPal's digital wallet is funded and used, as well as the contractual terms between PayPal and the two card networks. According to PayPal's financial report, the company received notices of investigation and requests for information from the FCA in March 2026. These requests relate to agreements that the regulator suspects could limit competition in the UK.
The FCA has emphasized that it has not reached any conclusions and has not found any breach of competition law at this stage. The investigation remains ongoing as the authority gathers evidence and assesses whether the arrangements in question infringe Chapter I and/or Chapter II of the Competition Act 1998. If the FCA identifies potential violations, it has the power to issue a statement of objections.
Implications for UK-facing brokers and payments
The probe highlights the card and digital wallet infrastructure widely used by UK-facing FX and CFD brokers for client funding. Major FCA-authorized brokers including IG, CMC Markets, Pepperstone and Plus500 support Visa, Mastercard and, in several cases, PayPal as funding options. The investigation therefore shines a spotlight on the payment rails that underpin access to many online trading platforms in the UK market.
While the outcome of the FCA's inquiry is still uncertain, the action signals closer regulatory scrutiny of digital payment systems and the role of major card networks in shaping market access. The case will be watched by market participants that rely on these payment channels for customer deposits and withdrawals, as the findings could influence how digital wallet and card-based funding arrangements are structured in the future.
