Fraud in Payments: A Changing Regulatory Landscape

Authorised push payment (APP) fraud has never strayed far from the headlines in recent years, as the digitisation of payments and the uptake of real-time payment solutions by consumers has meant that fraud has also inevitably risen. This has prompted concern from regulators the world over, as they attempt to get their heads around a new landscape where the rules of the game have changed.

Fraud is not happening as much via cloned cards thanks to initiatives such as strong customer authentication (SCA) effectively stamping it out. However, it is occurring via other methods, such as APP scams — and introducing means to prevent APP scams and establish effective, nuanced consumer protection has been far from easy.

In this blog, we give you a quick overview of fraud reimbursement across the world, from the UK, where the Payment Systems Regulator (PSR) has made very few friends with its incoming reimbursement requirements, to other jurisdictions such as Australia, the US, and the EU, where reimbursement rules and liabilities are also under the microscope. 

In the UK

‍Earlier this summer, the Payments Association in the UK said that fraud rules should be delayed by a year after the head of the PSR abruptly left his post.

In Australia

A Treasury minister has rejected calls for a UK-style mandatory reimbursement model for scam victims, arguing that an industry code for key sectors offers a more "extensive" solution.

In Northern Europe

‍Nordic banks have warned the European Commission of the potential exacerbation of fraud risks under new EU regulations, citing proposed changes to payment service provider liability and advocating for stricter oversight of telecom companies and intensified efforts to combat fraud on social media platforms.

In Brussels

Members of the European Parliament (MEPs) have adopted their official position on the Payment Services Regulation (PSR) and revisions to the Payment Services Directive (PSD3), including introducing more liability for social media and telecoms firms. 

In Singapore

Action is also being taken on the reshaping of the fraud landscape, and the country’s regulators are developing a framework for shared responsibility in dealing with phishing scams, noting that financial institutions and telecommunication companies can do more.

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