Payment service providers to incur higher costs under APP fraud proposals

With authorised push payment scams on the rise, alongside disappointing results from the banks' voluntary repayment code, the Payment Systems Regulator is to be given legislative power to propose a more rigorous reimbursement regime. Charlotte Hill and Melissa Whitley examine the consultation paper.

Charlotte Hillis a partner and head of the Financial Services Regulatory group at Taylor Wessing in London, whereMelissa Whitleyis an associate. Contact them onc.hill@taylorwessing.com andm.whitley@taylorwessing.com. With assistance from Chiagozie Ezennia (c.ezennia@taylorwessing.com).

On 29 September 2022, the Payment Systems Regulator (PSR) published aconsultation paper [1] on the mandatory reimbursement and cost allocation for authorised push payment (APP) scams (APP Consultation). The measures proposed will require reimbursement for APP scams and will improve the level of protection for victims of APP scams as well as incentivise payment service providers (PSPs) to prevent such scams.