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The UK payments industry is urging the new interim chief of the Payment Systems Regulator (PSR) to delay the implementation of new rules on Authorised Push Payments (APP) fraud by a year, citing concerns about potential long-term damage to the sector.
Following the departure of managing director Chris Hemsley, who had been overseeing plans to enhance protections for victims of APP fraud, David Geale has taken over as interim chief for nine months.
The industry is pushing for a 12-month postponement of the new rules, which are set to take effect in October 2024. The UK Payments Association believes that delaying the implementation will allow for adequate preparation and ensure that the right policies, technology, and systems are in place to safeguard the UK’s payment industry.
A briefing paper from the industry group argues that postponing the reimbursement rules will enable better readiness and facilitate the involvement of Big Tech, which is often implicated in APP scams.
The Association reiterates its position that the reimbursement threshold should be £30,000, not £415,000. Given that the average scam costs £11,000 for businesses and £1,500 for individuals, the recommended threshold of £30,000 is still significantly higher than the average scam amounts.
Last month, the Association raised concerns with the Economic Secretary to the Treasury, Bim Afolami, regarding the reimbursement cap, deeming it “simply not proportionate.”
Riccardo Tordera, Head of Policy and Government Relations at the Payments Association, expressed concerns, stating, “If the current changes are implemented, we believe the prudential risk and requirements to participate in the UK payments market will increase significantly – resulting in reduced competition and an increase in the unbanked population.”
He added, “It will also result in an increase in cost and friction of real-time payments and a decrease in investment into the UK Fintech market due to higher risks of failure and lower profitability.”
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