NatWest to Allow UK Consumers to Set their Own Daily Digital Bank Transfer Limits to Reduce APP Scams

NatWest, a major retail and commercial bank in the UK, will reportedly be letting clients set up their own daily digital bank transfer limits – which should help reduce the potential damage done by authorized payment push (APP) scams.

NatWest, Royal Bank of Scotland and Ulster Bank have put in place a default bank transfer limit of £20,000 per day. However, this will now be lowered to £5000 daily.

Clients are able to log in to their online accounts and, with a card reader, adjust this daily transfer limit, making it less than £5000 or more (but no more than £20,000). NatWest’s management stated that 95% of its clients have never conducted transfers of over £5000.

Consumer group Which? said this move was a step in the right direction. Which? had reportedly asked other lenders if they intend to follow NatWest’s move and Nationwide and Virgin Money said they’re thinking about the option. Others said they weren’t considering adjusting limits in this manner (for now at least).

Which? stated that personalized payment caps might help address APP scams, which have been increasing during the Coronavirus crisis, with total losses reaching almost half a billion pounds last year.

Although scammers are able to manipulate unsuspecting consumers by convincing them to adjust their transfer limits, letting clients set their own “normal” behavior and creating greater friction is “generally positive,” as it allows banks to caution users about fraud. Banks can also intervene if they believe something is not right, Which? explained.

NatWest’s management stated that it “also helps in a situation where a fraudster has taken control of a customer’s account as without the card reader they would not be able to increase the daily transfer limit.”

In addition to the increase in fraudulent activities after the COVID outbreak, there’s also been a rise in consumers engaging in online transactions (instead of visiting physical bank branch locations).

It may no longer be practical or affordable for banks to continue to maintain a large physical presence – which is why some UK banks have decided to share physical offices. As reported earlier this month, Barclays, Lloyds, NatWest, Santander, and HSBC will be sharing single bank branch locations in small UK towns.

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