The UK payments industry is urging the new interim chief of the Payment Systems Regulator (PSR) to delay the rollout of new rules aimed at addressing Authorised Push Payment (APP) fraud by one year. Stakeholders warn that proceeding with the implementation as scheduled could inflict “permanent damage” on the sector.
Recently, Chris Hemsley stepped down as managing director of the PSR after four years and was succeeded on an interim basis by David Geale for a nine-month period. Hemsley had been responsible for overseeing initiatives to enhance protections for victims of APP fraud, which is set to enable the reimbursement of up to £415,000 lost in such scams.
As these new regulations are scheduled to take effect in October 2024, the UK Payments Association has seized on Geale’s appointment to call for a twelve-month extension. They contend that more time is needed to ensure the necessary policies, technology, and systems are in place to protect the UK’s payment industry’s integrity and its capacity for providing safe, swift, and affordable transactions.
An industry briefing paper supports the request for a delay, emphasizing the importance of preparing adequately and involving major tech companies—identified as key players in APP scams— in the discussions.
Additionally, the industry argues that the proposed reimbursement threshold should be £30,000 rather than £415,000. With average losses from scams reported at £11,000 for businesses and £1,500 for consumers, the suggested mandatory threshold of £30,000 would still be more than double the average loss for businesses and twenty times the average for consumers.
Last month, the Payments Association expressed its concerns to the Economic Secretary to the Treasury, Bim Afolami, labeling the current cap as “simply not proportionate.”
Riccardo Tordera, head of policy and government relations at the Payments Association, stated, “If the current changes are implemented, we believe the prudential risk and requirements to participate in the UK payments market will increase significantly, leading to reduced competition and a higher rate of unbanked individuals.”
He also warned that this situation could escalate costs and friction associated with real-time payments, while deterring investment in the UK fintech sector due to heightened risks and diminished profitability.