An API is a person authorised as a payment institution under the Payment Services regulations and is included in the Financial Services register.
It allows companies to offer payment services in the UK, which could include remittance services, payment processing, operating payment accounts or issuing electronic money.
Any company wanting to hold customer funds, issue payment instruments or operate accounts for payment purposes will need to become an API.
Pexa said this was a “critical milestone” in its move towards launching its sale and purchase product in the second half of this year.
The authorisation by the FCA means that Pexa can act as a third-party managed account provider to UK conveyancers for sale and purchase transactions. This allows Pexa to hold and manage client money on behalf of conveyancers, reducing risk to conveyancers.
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Along with its current remortgage proposition, this will allow Pexa to facilitate around 70% of property transactions in England and Wales.
The firm added that there were “additional extensions” to the product planned to boost this coverage further.
Pexa said the sale and purchase proposition will build on the momentum of its remortgage proposition, which has processed around £100m in transactions since its launch in 2022.
Joe Pepper, UK CEO of Pexa, said: “We know that change in the property market has to be earned, not imposed. Any innovation introduced to the market has to be done the right way, able to scale, and built to last. Receiving FCA approval provides additional assurance over our considered approach, and of the strength of the controls and systems we have put in place.
“As we build towards the launch of our sale and purchase solution later this year, this news should give our partners further confidence we operate responsibly with the highest standards of security and compliance as we help support the industry’s modernisation and growth. We’re here for the long term, with security, stability, and partnership front of mind.
“This significant milestone will enable us to build further momentum in the UK, developing and deploying the trusted digital infrastructure to support the evolution of property transactions. We look forward to working even more closely with the conveyancing and lending industry as we do so.”
