Emma RadmoreThe Treasury has published the Payment Services (Amendment) Regulations 2024, which will allow payment services providers to delay payment processing where there are reasonable grounds to suspect fraud or dishonesty. The PSRs currently require that a payer PSP must credit the amount to the payee’s PSP by the end of the next business day from receiving the payment order.
The new exception will apply where:
- an authorised push payment transaction is to be executed wholly within the UK in sterling;
- is not initiated by or through a payee; and
- a PSP has established there are reasonable grounds to suspect a payment order from a payer has been placed subsequent to fraud or dishonesty perpetrated by a person other than the payer, and has established this no later than the end of the business day following receipt of the payment order.
Where this is the case:
- then the PSP may delay crediting the amount of the transaction to the payee account so that it can contact the payer or other relevant parties to establish whether it should execute the order;
- but the delay should be no longer than the end of the fourth business day following receipt of the order, and in fact be no longer than necessary;
- and the PSP must tell the payer about the delay, the reason for it, and any additional information it needs – unless it would be unlawful to do so.
The legislation is currently in draft for “technical checks”, and is open for comment to 12 April 2024. The government plans to lay the legislation before Parliament in the summer.