The Payment Systems Regulator (PSR) is planning an eight-week consultation on authorised push payment (APP) fraud to build on the introduction of new reimbursement requirements in the second half of 2024.
The consultation will focus on Pay.UK, the operator of the UK retail payments network including the Faster Payments System (FPS), specifically its reimbursement claims management system (RCMS).
Kate Fitzgerald, PSR Head of Policy, announced the consultation in a blog post yesterday (11 February), stating the PSR wants to hear industry views on whether regulatory requirements are needed for how the RCMS deals with APP fraud claims.
THe PSR hopes to publish the findings from the consultation in April 2024, with the ideal implementation date for any new requirements a key conclusion. Fitzgerald has clarified though that the PSR believes the earliest possible date will likely be in late 2024.
“Our plans to consult on RCMS proposals in April 2025 recognise that preparing for and implementing this ambitious policy has required significant effort from across stakeholders,” Fitzgerald said.
“We also know it is important that we provide certainty and clarity on our plans, and the timing of our RCMS consultation. While we had previously signalled that we may look to put regulatory requirements in place for the RCMS in May 2025 (if confirmed following consultation) this is no longer feasible.”
PSR still focused on fraud
The announcement comes four months after the APP fraud reimbursement requirements came into effect on 7 October. As expected, the UK’s long-running battle to counter APP fraud – and other forms of fraud – continues to take up a lot of time and effort from the country’s financial regulators.
According to figures released by UK Finance last year, the UK lost over £570m to fraud in H1 2024 alone, of which £213.7m was lost to APP fraud. This has caught the attention of regulators and the government, with the PSR introducing its reimbursement requirements and HM Treasury giving new fraud prevention powers to banks late last year.
The PSR’s APP fraud reimbursement requirements were not entirely well received at first. Extensive industry lobbying saw the reimbursement cap dropped from £415,000 to £80,000, and though payments and banking firms have been adjusting calls are still being heard for big tech and social media firms to also bear responsibility for reimbursement.
While it has commanded the most headlines, the reimbursement policy is not the only action the PSR has taken on fraud. This year’s consultation follows on from similar industry engagement last year, when the regular consultation on proposals to introduce requirements for payments service providers to use the RCMS.
Despite some industry pushback, the PSR has always been adamant that its reimbursement policy was the right decision, and as both the regulator and even banking stakeholders noted last year, the reimbursement requirement was adopted quite smoothly.
“We’re quite confident, we’re pleased with where we’ve got to but recognise that this is part of the journey,” said David Geale, PSR Managing Director, at the Financial Crime 360 conference in November 2024 – hinting that more actions, like the consultation announced this week, were on the way.
