The U.K. financial regulator is investigating PayPal, Visa, and Mastercard for suspected anti-competitive practices in the “funding and usage” of PayPal’s digital wallet.

Compliance should view this action as part of a developing trend of U.K. regulators tightening their scrutiny of digital payment services. Experts are warning that the era of “light-touch” regulation in the sector is now over.

Ruth Prickett graduated from Cambridge University with a BA hons in History and has specialized in business and finance journalism for the past 20 years. She was editor of Financial Management, the magazine...