Recent regulatory developments focussed on the payments sector. 

Contents

• Global Payments Newsletter: January 2021
• UK contactless card payments limit: FCA consults on increase
• UK SCA-RTS and payments and e-money approach documents: FCA CP21/3
• APP scams: LSB report on review of CRM Code
• Proposed codified Regulation on cross-border payments in EU: ECB opinion

Global Payments Newsletter: January 2021

We have published our January 2021 Global Payments Newsletter which reports on:

• regulatory developments;
• payment market developments; and
• surveys and reports.

UK contactless card payments limit: FCA consults on increase

In a COVID-19 update on mortgages, consumer credit, banking and payments, the UK Financial Conduct Authority (FCA) announced that it intends to consult on increasing the spending limit for contactless card payments from £45 to £100.

The FCA notes that, since the limit for contactless card payments was raised to £45 in April 2020 at the start of the pandemic, people are increasingly making use of contactless payments. It states that it is important that payments regulation keeps pace with consumer and merchant expectations. Therefore, as part of a wider consultation, the FCA will shortly be seeking views on amending its rules to allow for a possible increase in the contactless limit to £100. This consultation has subsequently been published in FCA CP21/3; the consultation period on the proposals relating to contactless is 24 February 2021.

UK SCA-RTS and payments and e-money approach documents: FCA CP21/3

The FCA has published a consultation paper, CP21/3, on changes to its technical standards on strong customer authentication and common and secure methods of communication (SCA-RTS), to the guidance in its approach document on payment services and electronic money (e-money), and to its Perimeter Guidance manual (PERG).

The proposals are intended to remove identified barriers to continued growth, innovation and competition in the payments and e-money sector (including open banking), while making the payments and e-money sector more resilient and protecting consumers if firms fail.

The deadline for responses to the FCA's proposals relating to contactless is 24 February 2021. The remainder of the consultation proposals close to comments on 30 April 2021.

Read more in our separate briefing: And so it begins: FCA consults on post-Brexit changes to SCA-RTS and Payments Approach Document.

APP scams: LSB report on review of CRM Code

The Lending Standards Board (LSB) has published a report following its review of the contingent reimbursement model code (CRM Code) for authorised push payment (APP) scams. The review considered how the CRM Code has been implemented by firms, adopted into the wider payments landscape, and where improvements are needed to ensure greater consistency in its application. Based on its findings, the LSB has made ten recommendations.

The LSB will immediately begin work on the recommendations. Where the recommendations require further work, it will issue a call for input by the end of Q1 2021. The LSB will publish a timeline for its work by the end of February 2021.

The LSB has also published a data analysis to accompany the report, which provides information about types of APP scams, resolution decisions and customer reimbursement levels under the CRM Code.

Proposed codified Regulation on cross-border payments in EU: ECB opinion

The European Central Bank (ECB) has published an opinion on the European Commission's proposal for a new Regulation on cross-border payments in the EU to codify the existing Regulation on cross-border payments.

In the opinion, the ECB generally welcomes the codification exercise and notes that instruments affected by codification do not contain substantive changes. However, it opines on one provision of the proposed Regulation that was introduced by Regulation 2019/518. The provision relates to the reference to the euro foreign exchange reference rates issued by the ECB (ECBRRs).

The ECB is concerned that the reference to the ECBRRs in the proposed Regulation could, contrary to the objectives of the ECBRRs, create incentives for some market participants to trade at the ECBRRs. Therefore, the ECB recommends that the reference in Article 4 of the proposed Regulation to the ECBRRs is removed and replaced by an appropriate reference to a foreign exchange benchmark rate that falls within the scope of the Benchmarks Regulation (BMR), and which may be used in the context of the currency conversion charges. The accuracy and integrity of such benchmarks, ensured by the BMR, protects the interests of customers of payment service providers and parties providing currency conversion services.

The ECB's opinion includes a technical working document with suggested drafting to incorporate the suggested amendment.

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