Recent regulatory developments of interest to financial institutions.
Contents
- Funding no-blame APP scams: PSR considers options
- COVID-19: PSR update on work supporting access to cash
- EU Retail Payments Strategy: European Commission consultation
Following a seasonal break, the next update will be published on 27 April 2020.
Funding no-blame APP scams: PSR considers options
The Payment Systems Regulator (PSR) has published slides and speaker notes of Chris Hemsley, PSR Managing Director, for a call on authorised push payment (APP) scams, which was held on 30 March 2020. The note also includes summaries of Q&As addressed during the call and an update from the Financial Ombudsman Service (FOS) relating to its work involving APP scams. During the call, Mr Hemsley discussed:
- the current state of play, looking at recent fraud statistics and the work that the PSR and Financial Conduct Authority (FCA) are progressing with the industry on fraud prevention;
- outcomes under the Contingent Reimbursement Model (CRM) Code, including a discussion of data on reimbursement levels under the Code, the findings from the Lending Standard Board's thematic review, the FOS's experience of complaints and potential barriers to take up of the Code;
- the long-term funding for no-blame situations; and
- the options for the way forward.
Mr Hemsley considered three options for the way forward:
- to continue with the current approach, addressing the issues that have been identified and working within the existing rules;
- return to the concept of an Faster Payments Service (FPS) rule change, developed and proposed by the payments industry. This would involve changes including introducing a new rule into FPS that requires reimbursement of customers who have fallen victim to an APP scam. Any new rule(s) would also need to be enforceable against firms that chose not to comply; and
- rely on action by the PSR. Currently, due to the revised Payments Services Directive, the PSR's view is that it cannot require reimbursement to be made to APP scam victims. However, this position may change in the future in the light of Brexit. Mr Hemsley also referred to a recent letter the PSR had received from Pay.UK and UK Finance calling for a change to legislation, on the basis that there was no consensus around how best to address the issues raised.
COVID-19: PSR update on work supporting access to cash
On 8 April 2020, the PSR published an update on its work supporting access to cash during the COVID-19 pandemic. The PSR says that its immediate priority is to work with the other members of the Joint Authorities Cash Strategy (JACS) group, along with authorities and industry to support cash access for consumers that need it now, while also ensuring the safety of firms' workforces.
The PSR is working with people from across the sector to make sure cash and digital payment networks remain available. It is engaging with LINK and independent ATM deployers as a matter of priority.
The PSR will continue to encourage the industry to develop effective and comprehensive local community engagement on how needs for access to cash can be met.
The PSR includes a list of FAQs from across the sector in relation to cash and payments. The PSR will continue to add to this list.
EU Retail Payments Strategy: European Commission consultation
The European Commission is consulting on a "Retail Payments Strategy for the EU". The consultation is published in accordance with the Commission's Work Programme for 2020 and, together with the separate consultation on a new "Digital Finance Strategy" (published on the same day), is a key step towards the adoption of a retail payments strategy for Europe.
The consultation does not include questions on payment-related aspects of cryptocurrencies as these are covered in the Commission's pre-existing consultation regarding the regulation of cryptoassets, including stablecoins.
The consultation focuses on four key objectives:
- fast, convenient, safe, affordable and transparent payment instruments, with pan-European reach and "same as domestic" customer experience;
- an innovative, competitive, and contestable European retail payments market;
- access to safe, efficient and interoperable retail payments systems and other support infrastructures; and
- improved cross-border payments, including remittances, facilitating the international role of the euro.
The consultation closes on 26 June 2020.
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