On the day of the UK’s General Election, The Payments Association has urged the incoming Chancellor to implement a ‘Tech Levy’ on major social media platforms to help cover the costs associated with payments fraud arising from their services.
The Association argues that large tech companies should be held accountable for compensating fraud victims, adhering to the ‘polluter pays’ principle. It has expressed strong concerns about the new reimbursement rules set to be introduced by the Payment Systems Regulator (PSR), which currently limit mandatory refunds for APP fraud victims to £415,000. The Payments Association is advocating for this threshold to be significantly lowered to a maximum of £30,000.
Additionally, the Association has called for the appointment of a dedicated Anti-Fraud Minister who would coordinate efforts across different government departments to address the increasing threat of fraud effectively.
As the Labour Party appears poised for a substantial victory in the election, its draft proposals suggest that the PSR’s refund rules are “unfair and unsustainable,” and indicate a belief that tech companies should take responsibility for compensating fraud victims.
In a letter to the future Chancellor, the Payments Association also requested the publication of an ambitious National Payments Vision and Strategy that includes the next steps for open banking and open finance, along with legislative measures to establish a robust digital asset ecosystem that includes web3, DeFi, and smart contract standards.
Tony Craddock, Director General of The Payments Association, emphasized that a clear vision and strategy from the new government would foster significant investment and reinforce the UK’s leadership in the global payments landscape, leading to sustained growth across the country.
He expressed hope that the Chancellor would recognize the advantages of lowering the reimbursement threshold for APP fraud claims and consider appointing a dedicated Anti-Fraud Minister. Craddock noted that the current environment is overly conducive to fraudsters, and the PSR’s proposed reforms could worsen the situation. He stressed that timely action is essential to mitigate potential risks with the forthcoming changes set for October 7th.
UK Finance has also presented its own financial services manifesto, outlining key priorities for the incoming government. This manifesto aligns with the Payments Association’s demands and emphasizes the need for legislation to ensure that information maintained by Companies House is reliable, along with advocating for the issuance of a digital gilt to promote the development of securities tokenization, among other important initiatives.