The Payments Association Shares Comments After UK’s Payment Systems Regulator Updates APP Rules

With the Payment Systems Regulator‘s (PSR) new Authorized Push Payments (APP) rules coming into effect, Riccardo Tordera, director of policy and government relations at The Payments Association said that they will be monitoring the overall / anticipated impact of the latest APP fraud rules closely in the UK.

As previously reported, the Payments Association has advocated for a lower liability level for APP fraud. The PSR has noted this and is currently pursuing a way to adjust reimbursements to a more realistic level.

Riccardo Tordera, director of policy and government relations at The Payments Association also noted that they now remain focused on pushing for “effective” data sharing that can tackle the fraud “at source” and for a mandatory “involvement of social media platforms in the reimbursement scheme.”

Riccardo Torderao of The Payments Association added that the introduction of the Fraud Intelligence Reciprocal Exchange (FIRE) between some banking institutions as well as Meta is a “small” step in the right direction. However, they also pointed out that other issues remain including the “alignment of the definition of consumer standard” of care to the interpretation that British courts give of gross negligence. They now call for the regulator to review the rules in six months’ time, “rather than 12 as currently planned.”

The Payments Association says that it has been vocal in highlighting why “a £415,000 threshold would have not addressed consumer protection” adequately nor could have been sustainable by relatively smaller industry players, thus “seriously damaging” competition and stifling innovation.

The Payments Association is still concerned – even though the threshold being lowered to £85,000, as this still “very high level” doesn’t remove the risk for unintended consequences such as “first-party fraud” and “moral hazard” (let’s not forget the average scam is £12k for businesses and less than £2k for individuals), and it’s linked to a deposit scheme protection whilst here we are talking “about transactions, not deposits (hence we should mirror what happens in the credit cards world).”

The points the Payments Association would like to make as the new rules come into force are:

  • We want all defrauded consumers to get their money back, but we feel due process is required to protect against fraudulent claims. A five-day automatic payout for large sums of money without proper diligence being carried out will only harm the industry.
  • If the industry is harmed and many of the smaller innovative PSPs go out of business, it is vulnerable consumers who will be hit worst as:
    • fees will increase;
    • banks and PSPs will de-bank those most in need of accounts (in and underbanked consumers); and
    • the friction in banking services will increase, faster payments will become slower payments, and many of the neediest customers will find their ability to send and receive money restricted.

Data sharing and mandatory involvement for social media is the “short-term focus” while monitoring the “overall functioning of the rules and their impact on consumers and businesses.”



Sponsored Links by DQ Promote

 

 

 
Send this to a friend