From 7 October 2024 Payment Service Providers (PSPs) will be liable for the reimbursement of customer losses associated with Authorised Push Payment (APP) fraud. The rule change makes reimbursement of losses mandatory, with the costs of reimbursement split 50:50 between the sending and receiving firm, stating that reimbursement should occur within five working days up to a maximum of £415,000. This is a massively significant change which will have huge financial implications for senders and receivers of payments, placing huge emphasis on the financial services industry to prevent APP fraud.
So what are the key considerations for Banks and Non-Banks in preparing for APP fraud reimbursement?
In this mini-blog series, we have outlined some of the key areas for PSPs to consider as they prepare to tackle this change and aim to minimise the inevitable operational and financial stress that will come with the new requirements.
In part 1 of this series, we take a look at how firms need to evaluate their risk, how they need to work more closely with their payment counterparties, and the role of technology and data in APP fraud prevention.