The Berne Financial Services Agreement: What It Means – and Doesn’t Mean – for Payment and EMI Firms

The Berne Financial Services Agreement (BFSA), signed between the UK and Switzerland in December 2023, represents a landmark step in post-Brexit cross-border financial services cooperation. It provides a framework for mutual recognition of certain financial services, allowing firms to access each other’s markets more easily and with less regulatory duplication.

But what about the payments sector? Are Payment Institutions (PIs) and Electronic Money Institutions (EMIs) included?

The short answer: No.

What the BFSA Covers

The BFSA was designed with wholesale financial markets in mind. It establishes recognition in areas such as:

• Asset management – portfolio management, investment advice, fund management.

• Investment services – dealing on own account, execution, underwriting, advisory services.

• Insurance – general insurance, reinsurance, and intermediaries.

• Banking services – lending and deposit-taking.

• Financial market infrastructure – clearing, settlement, and custody.

  
  

These are sectors where Switzerland and the UK both have significant global strength and a long-standing tradition of cooperation.

What the BFSA Does Not Cover

While comprehensive in scope for investment, insurance, and banking, the BFSA does not extend to payment services or e-money issuance.

That means:

• Payment Institutions (authorised under PSD2 in the EU, and the UK Payment Services Regulations 2017)

• Electronic Money Institutions (EMIs) (authorised under the UK Electronic Money Regulations 2011)

are outside the scope of the mutual recognition framework.

Put simply, the BFSA does not create market access rights for firms in the payments and e-money space.

Why Aren’t Payment Firms Included?

There are several reasons:

1. Different risk profile – Payment services are primarily consumer-facing retail activities, whereas the BFSA is aimed at wholesale markets.

2. Existing cross-border access – Payments tend to operate under global card schemes, correspondent networks, or local licensing regimes rather than bilateral treaties.

3. Regulatory divergence – The UK and Switzerland do not share an equivalent legislative base for payments and e-money in the same way they do for investment and insurance services.

   
   

What This Means for Payment & EMI Firms

For UK and Swiss payment firms, business continues as usual:

• Authorisation is still required locally – a UK EMI cannot passport into Switzerland under the BFSA, and vice versa.

• Reliance on partnerships – firms will need to use correspondent banking, acquiring relationships, or licensing subsidiaries to access the other market.

• Regulatory engagement is separate – payments regulation will continue to evolve independently in the UK and Switzerland.

  
  

Final Thoughts

The Berne Financial Services Agreement is a major win for asset managers, insurers, and investment services – but it leaves the payments industry untouched.

For Payment Institutions and EMIs, the takeaway is clear:

• The BFSA does not provide any new rights of access.

• Cross-border activity must continue under existing licensing frameworks.

• Firms should keep an eye on whether payments are addressed in any future bilateral agreements.

At K2, we’ll be monitoring developments closely. While the BFSA is a milestone for financial services alignment, payments and e-money remain firmly outside its scope – and firms in these sectors must plan accordingly.