The UK Payment Systems Regulator (PSR) has proposed that its incoming authorised push payments (APP) fraud reimbursement rules should apply to payment service providers (PSPs).
PSPs that participate in faster payments and provide a payment account to payment service users should be in the scope of the new APP reimbursement rules, according to a proposed specific direction.
The bid is one of three legal instruments the PSR will use to implement its APP fraud reimbursement policy, with the first two being published in July this year.
The first and the second directions look at necessary rule changes and measures within faster payments to ensure that Pay.UK — the operator of faster payments — has an effective monitoring regime for compliance.
The third proposal, published September 28, requires PSPs to follow the rules and reimburse victims of APP scams in accordance with the regulator’s policy.
This follows the industry’s ask for further clarity on the scope of the requirements and the PSPs it would capture.
The PSR said it has “listened to this feedback” and is now proposing the specific direction to provide the necessary clarity.
The direction means that PSPs must reimburse all in-scope customers who fall victim to APP fraud, splitting the cost of reimbursement 50:50 between the sending and receiving institution.
PSPs will also have to report data to Pay.UK and inform the PSR of any indirect PSP customers they provide access to.
The regulator said it intends to finalise and publish all three special directions by the end of 2023.
PSR gives more time for implementation
In the document, the PSR also proposes delaying the due date of these rules.
In its July consultation, the regulator said it wanted the new requirements to be in place “as soon as practicable” and proposed a deadline of April 2, 2024.
However, in light of the feedback received from the industry, the PSR now proposes October 7, 2024 as the new implementation date.
The regulator said this date “balances the need to implement the new protections as soon as possible, against the need to avoid inconsistencies and confusion that could be caused by not allowing enough time for the arrangements to go live in an efficient way”.
Going forward, the PSR said it is planning to consult on similar reimbursement requirements for the participants of the clearing house automated payment system, the UK’s high-value payment infrastructure.
The expected launch of that consultation is end of the first quarter of 2024.