The UK’s Payment Systems Regulator (PSR) is set to expand its scam reimbursement program to include transactions within the Chaps high-value payments network.
In June 2023, the PSR established a policy mandating payment firms to reimburse victims of Authorised Push Payment (APP) scams that occur over the Faster Payment System (FPS), which accounts for the majority of these fraudulent activities. Recognizing that criminals exploit multiple payment systems, the PSR announced in December 2023 its support for the Bank of England’s introduction of similar requirements for Chaps.
Chaps is a same-day sterling payment system primarily used for settling high-value wholesale transactions, as well as urgent lower-value payments such as property purchases or deposits. The PSR’s new regulations are designed to provide consumers with consistent protection across these two prominent UK payment systems. This initiative will also encourage more payment firms to actively combat scams, thereby minimizing the chances of fraudsters shifting from FPS to Chaps due to varying protective measures.
Kate Fitzgerald, the PSR’s head of policy, emphasized the importance of making it more difficult for fraudsters to operate, stating, “Providing consistent incentives across payment systems is a crucial step in ensuring everyone does their best to tackle scams.” She highlighted that these changes aim to close existing vulnerabilities and ensure that more payment firms are motivated to prevent scams while safeguarding victims.
After conducting a prior consultation, Fitzgerald indicated that the regulator anticipates finalizing and releasing the specific guidelines by September 2024. The PSR aims for a go-live date of October 7, aligning with the FPS reimbursement policy so that APP scam victims receive similar protections across both payment systems.