The UK’s updated Common Reporting Standard (CRS) framework is now in force, bringing certain electronic money products within reporting scope for the first time. 

For electronic money institutions (EMIs), payment institutions and other non-bank payment firms, the focus has shifted from implementation planning to confirming scope, validating compliance frameworks and preparing for first reporting in 2027. 

What is the Common Reporting Standard (CRS)?

The CRS is the OECD’s global tax transparency framework. Its purpose is to combat offshore tax evasion by requiring financial institutions to identify the tax residence of account holders and report certain financial account information to their local tax authority.

That information is then automatically exchanged with tax authorities in the account holder’s jurisdiction of tax residence under the Automatic Exchange of Information (AEOI) framework.

In the UK, CRS is implemented through the International Tax Compliance Regulations 2015 and reporting is overseen by HM Revenue and Customs (HMRC). Historically, CRS obligations have applied primarily to banks, custodians and investment entities, but this is now changing.

What changed under CRS in 2026?

Amendments to the OECD’s Common Reporting Standard took effect from 1 January 2026, following a review that identified gaps in the original framework. In particular, the review noted that modern digital payment products can function in a very similar way to traditional bank accounts, while sitting outside the historic CRS perimeter.

From 1 January 2026, the CRS explicitly brings certain e‑money products into scope through the concept of Specified Electronic Money Products (SEMPs).

Broadly, a SEMP is an electronic money product that:

  • represents a digital version of a single fiat currency,
  • is issued on receipt of funds for payment purposes,
  • gives the holder a claim on the issuer,
  • is accepted by parties other than the issuer, and
  • is redeemable at par value.

In practice, this captures many wallet‑based and account‑like e‑money products offered by EMIs to both business and retail customers.

For some firms, this may be the first time their core products are clearly treated as financial accounts for CRS purposes.

Which EMI and payment products are in scope for CRS reporting?

Typically in scope

For EMIs and similar providers, products are likely to fall within scope where they:

  • allow customers to store monetary value over time,
  • provide account‑like functionality, such as balances and payment cards,
  • operate similarly to a deposit or payment account, even if they are not labelled as such.

This means that multi‑currency e‑money accounts, business wallets and card‑linked wallets are commonly within scope under CRS 2.0.

Importantly, CRS applies to both individuals and entities, meaning firms must assess not just retail accounts but also corporate customers, including active/passive classification and identification of controlling persons where required.

Active entities are those that carry on genuine trading or operational activities and are generally not subject to additional reporting beyond the entity itself. Passive entities are those that primarily earn passive income, such as interest or dividends, and do not carry on substantive business activities.

Typically out of scope

By contrast, products may fall outside CRS where they are:

  • designed solely to facilitate the transfer of funds, and
  • do not allow customers to store value or retain balances.

This often includes merchant acquiring services, payment processing and settlement services and alternative payment methods that simply move funds from payer to payee. 

However, this exclusion is nuanced. Where funds are held for extended periods (for example, beyond 60 days) in the ordinary course of business, a product may begin to look account‑like and require closer assessment.

Are any e-money products exempt from CRS reporting?

CRS includes several exclusions intended to remove low‑risk products from scope. Of particular relevance to EMIs is the low‑value SEMP exclusion.

A specified electronic money product may be treated as an excluded account where the rolling average balance does not exceed USD 10,000 (or equivalent) over any consecutive 90‑day period.

Where this threshold is exceeded, the exemption falls away and the account becomes reportable from that point onwards.

These exclusions are applied at account level, not customer level and require ongoing monitoring rather than a one‑off assessment. Firms relying on exemptions should ensure that appropriate systems and controls are in place to evidence eligibility.

What should UK EMIs and payment firms do now?

For UK EMIs and payment firms, the priority in 2026 is to ensure that implementation is robust, with systems, controls and governance operating effectively ahead of first reporting submissions in 2027.

  • Confirm product scope
    Reassess whether electronic money products fall within the definition of a Specified Electronic Money Product (SEMP), particularly where products offer stored value, wallet functionality or account-like features. This review should already be underway during 2026 to confirm the treatment of products relevant to the 2026 reporting year.
  • Validate onboarding and due diligence controls
    Ensure customer onboarding reflects the amended CRS requirements from 1 January 2026, including the collection and assessment of valid self-certifications for new accounts.
  • Review existing customer populations
    Identify legacy accounts that require remediation or refreshed classification during 2026 so that any issues are addressed ahead of first reporting submissions in 2027.
  • Test reporting data and governance
    Validate data capture, customer classification logic, exception handling and governance oversight before first reporting submissions in 2027, with testing completed sufficiently in advance to resolve defects and evidentiary gaps.
  • Review outsourcing and operational dependencies
    Where onboarding, customer data or reporting processes are outsourced, firms should confirm during 2026 that operational accountability, escalation routes and oversight responsibilities remain clear ahead of first reporting in 2027.

Final thoughts

CRS 2.0 reflects a broader regulatory trend: functionality matters more than labels. Products that look and behave like accounts are increasingly regulated as such, even when they are offered by non‑bank institutions.

For EMIs, APIs and payments firms, early preparation is key. Firms that act now will avoid costly remediation later and demonstrate to regulators that they are taking a proportionate, risk‑based approach to tax transparency.

How fscom can help

fscom advises EMIs, payment institutions and fintech firms on CRS applicability, implementation and regulatory compliance.

If you would like to discuss how the updated CRS framework applies to your products, or need support with implementation, get in touch.