From October 2024, payments services providers in the UK must reimburse consumers who have fallen victim to an APP scam when using Faster Payments. The reimbursement will be split 50:50 between sending and receiving PSPs.

The Payments Association has written to the new Economic Secretary to the Treasury and City Minister to share concerns from non-bank members that these rules from the Payment Systems Regulator’s (PSR) "will undermine competition, stifle innovation, reduce investment, and force smaller players to a disorderly exit from the UK. It could also induce greater levels of de-banking, predominately among vulnerable and underbanked consumers."

The association has also requested there be a phased approach to implementation, ensuring that the per-claim upper liability threshold is proportionate and much closer to average losses. This threshold, according to the Payments Association, must be reduced to £30,000 from £415,000. In addition to this, there must be reviews every six months investigating the consequences applying the reimbursement scheme has had on economic growth, competition and innovation, and arguably, most importantly, fraud.

Riccardo Tordera, director of policy of The Payments Association, says: "Fintech is the future of financial services and we are ready to play our part to contribute to the growth agenda. But we need to see the regulatory change we have been requesting for months. Good regulation allows responsible risk-taking which, in turn, drives good behaviours. I remain convinced that this is the only way to deliver sustainable growth. The expectation for the new government to show strong leadership is higher than ever. It’s time to deliver growth, and not just talk about it."

Tony Craddock, director general of The Payments Association, adds: "We appreciate Labour’s strong words on the importance of tackling fraud, but these must be mirrored by actions. Fraud is an issue that impacts every department of state, but as there is no obvious departmental lead. It is everybody’s problem and nobody’s priority. Hence, we would welcome the appointment of a dedicated Minister to coordinate cross-departmental actions. It is critical that anti-fraud measures are tackled in the round, with all parties bearing some responsibility: government, law enforcement, payments providers, retail, the technology sector and consumers."

On the call to Government to establish a ‘Tech Levy’, Craddock adds: "We welcome the news reported on Friday 28th June that ‘Labour has drafted plans to make tech companies liable to reimburse victims of online fraud, in a departure from controversial rules’."