In a significant move, the UK Payments Association has urged David Geale, the new interim chief of the Payment Systems Regulator (PSR), to delay the implementation of new APP (authorised push payment) fraud rules by one year. The Association warns that failing to postpone could inflict “permanent damage” on the sector.
Leadership Changes at PSR
After a four-year tenure, Chris Hemsley stepped down from his role as managing director of the PSR last week. David Geale has taken over on an interim basis for nine months, inheriting the responsibility of overseeing new protections for victims of APP fraud. These new rules, set to take effect in October 2024, aim to reimburse victims for up to £415,000 lost to such frauds.
Industry Concerns and Calls for Delay
The UK Payments Association is leveraging Geale’s arrival to advocate for a 12-month postponement. They argue that this delay is necessary to ensure the right policies, technology, and systems are in place, preventing potential long-term damage to the UK’s payment industry. The Association’s briefing paper highlights the need for more preparation time and suggests involving Big Tech, which it identifies as a significant source of APP scams, in the process.
Reimbursement Threshold Debate
The current threshold of £415,000 for mandatory reimbursement has also been contested by the industry group. They recommend a more modest threshold of £30,000, which is still considerably higher than the average scam costs of £11,000 for businesses and £1,500 for individuals. Last month, the Association expressed these concerns in a letter to Bim Afolami, Economic Secretary to the Treasury, deeming the current cap “simply not proportionate.”
Potential Risks Highlighted
Riccardo Tordera, head of policy and government relations at the Payments Association, emphasized the potential risks of implementing the changes without delay. “If the current changes are implemented, we believe the prudential risk and requirements to participate in the UK payments market will increase significantly,” he said. This could lead to reduced competition, an increase in the unbanked population, higher costs, more friction in real-time payments, and decreased investment in the UK fintech market due to heightened risks and lower profitability.
Stay updated with FinQfy for the latest developments on APP fraud, PSR, and UK Payments Association initiatives.
