Included in this edition of InContact: NPSO widens scope of procurement for New Payments Architecture; PSR responds to UK finance fraud data and ECJ gives judgement on interpretation of 'payment account' under the PSD
FCA publishes transcript of 2018 annual public meeting
The Financial Conduct Authority (FCA) has published the transcript of its 2018 annual public meeting, this took place on 11 September 2018. Alongside this they have provided questions submitted before the meeting, together with the FCA's answers. The transcript can be found here. The pre submitted questions can be found here.
FCA, 8 October 2018
October 2018 policy update
The FCA has published their latest policy development update which gives information on its recent and upcoming publications. Their future publications include a policy statement on its proposed general standards and communication rules for the payment services and e-money sectors (CP18/21), which is expected in January 2019.
FCA, 5 October 2018
FCA TR18/3: Money laundering and terrorist financing risks in the e-money sector
The FCA has published the findings of their thematic review into money laundering and terrorist financing risks in the e-money sector. Overall, the review established that the 13 firms assessed had reasonably effective anti-money laundering and counter-terrorist financing systems and controls. However, the work did highlight some weaknesses, therefore all firms should avoid any complacency.
FCA, 3 October 2018
APP Scams Steering Group - Draft Contingent Reimbursement Model Code
The Authorised Push Payments (APP) was established by the Payment Systems Regulator in March 2018 to lead the development of a voluntary industry code for the reimbursement of victims of authorised push payment scams. They have published a draft code for consultation which closes on 15 November.
APP, 28 September 2018
CP18/2 - Draft Specific Direction 8 - protected ATMs
The Payment Systems Regulator (PSR) published consultation paper CP18/2. They propose to issue a specific direction to LINK Scheme Holdings Ltd (LINK), the operator of the LINK ATM system, in order to make sure LINK does all it can to fulfil the public commitments it made at the beginning of 2018 regarding the ongoing availability of free access to cash for UK consumers. The consultation closed on 9 October.
PSR, 25 September 2018
NPSO widens scope of procurement for New Payments Architecture
The New Payment Systems Operator (NPSO) published initial details of a new procurement process for the clearing and settlement layer that will form the backbone of the New Payments Architecture (NPA). The NPA is a new conceptual model for payments in the UK, which will take over the processing of more than £6.7 trillion of Bacs, Faster Payments and potentially cheque payments every year, from 2021.
NPSO, 24 September 2018
PSR responds to UK Finance's fraud data
The PSR has responded to UK Finance's latest fraud data. They highlighted that consumers need to be better protected from authorised push payment fraud. The PSR want to make it harder for criminals to commit this type of crime and reduce the impact on the victim.
PSR, 25 September 2018
PSR makes assessment of 2018 annual CASS review
The PSR has published its annual monitoring 2018 on the Current Account Switch Service (CASS)'s compliance with the Payment Account Regulations 2015 (PAR). This follows a review of information and evidence submitted by Bacs on behalf of CASS for the purpose of an annual assessment. In summary, the PSR is satisfied that the CASS is in the interests of the consumer and is compliant with the PAR.
PSR, 18 September 2018
PSR gives details of information notices issued to Mastercard and Visa
The PSR has published details of the information notices which it issued to Mastercard Europe SA and Visa Europe Ltd in July 2018. The information notices are intended to help the PSR monitor compliance with the caps on interchange fees on payment card transactions imposed by the Interchange Fee Regulation (EU) 2015/751 (IFR). Although the PSR does not usually publish details of information notices issued to regulated persons, it has published details of these notices as they asked for information on payments received or paid by individual issuers and acquirers.
PSR, 18 September 2018
CP18/25: Approach to final Regulatory Technical Standards and EBA guidelines under the revised Payment Services Directive (PSD2)
The FCA published consultation paper CP18/25 which consults on the new rules and guidance to implement the revised Payment Services Directive (PSD2). Comments are expected by 12 October so that they can publish their final position in early 2019.
FCA, 17 September 2018
Regulator’s intervention on ATM closures may be "too little, too late"
The Treasury Committee Chair, Rt Hon Nicky Morgan MP, warns as new figures show one protected ATM closes every other day. LINK is the operator of the UK’s cash machine network. Earlier this year, it announced a 20 per cent reduction over four years in its interchange fee – the fee paid by card issuers (banks and building societies) to ATM operators, which funds the network. They said that they must ensure that LINK is held to its commitment to maintain the broad geographic spread of free-to-use ATMs.
Treasury Committee, 12 September 2018
PSR responds to LINK's first ATM Footprint Report
The PSR published their response to LINK's 'Footprint Report'. In light of declining ATM usage, the PSR is continuing research with consumers, ATM operators, banks and other interested parties, and will work with representative organisations and government to look at the way people use and access cash.
PSR, 12 September 2018
Request to Pay developer portal launched
Payment Service Providers (PSPs) and billers are being invited to register to play their part in developing ‘Request to Pay’ – a new way to improve the control, flexibility and transparency of bill payments. The development of the Request to Pay service is one of the end user deliverables being overseen by the NPSO as part of its role in creating a New Payments Architecture (NPA).
Fast Payments, 10 September 2018
CP18/24: Quarterly Consultation Paper No 22
The FCA published consultation paper CP18/24 which focuses on changes to its supervisory principles and changes to the reporting requirements in the Supervision manual for authorised payment institutions (APIs). The consultation closed on 7 October and 7 November respectively.
FCA, 7 September 2018
Draft EU Exit SIs for payment services, e-money and the SEPA Regulation
The programme of secondary legislation to ensure that the UK continues to have a functioning financial services regulatory regime in all scenarios, when the UK leaves the EU in March 2019 has been updated with the addition of the 'Draft EU Exit SIs for payment services, e-money and the SEPA Regulation', 'Electric Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018', and 'The Credit Transfers and Direct Debits in Euro (Amendment) (EU Exit) Regulations 2018'.
HM Treasury, 5 September 2018
PSR welcomes the publication of an industry code to protect consumers against authorised push payment (APP) scams
The PSR has confirmed its plans to consult by December 2018 on using its regulatory powers to give a General Direction to banks and payment service providers to implement confirmation of payee - an important tool for preventing APP scams. The proposed direction would require banks and payment service providers that are participants in the Faster Payments System to: i) be capable of receiving and responding to confirmation of payee requests from other PSPs by 1 April 2019 and ii) send confirmation of payee requests and present responses to their customers by 1 July 2019.
PSR, 28 September 2018
Guidelines on complaints-handling for the securities and banking sectors
The European Banking Authority (EBA) published the final versions of the updated Joint Committee guidelines on complaints-handling. The guidelines apply to authorities competent for supervising complaints-handling by firms in their jurisdiction. With regard to authorities competent for supervising complaints-handling by credit intermediaries and non-credit institution creditors under the Mortgage Credit Directive and payment institutions that provide only payment initiation or account information services under the Payment Services Directive, the guidelines apply from 1 May 2019.
EBA, 4 October 2018
ECJ gives judgment on interpretation of ‘payment account’ under the PSD
The European Court of Justice (ECJ) published their response to a request for a preliminary ruling concerning the interpretation of Article 4(14) of the Payment Services Directive (PSD). The question referred to the ECJ was whether Article 4(14) of the PSD must be interpreted as meaning that of a savings account which allows for sums deposited without notice and from which payment and withdrawal transactions may be made solely by way of a current account, called a ‘reference account’ in Austria, comes within the concept of ‘payment account’. The ECJ decided that in this context a savings account does not come within the concept of ‘payment account’ under Article 4(14) of the PSD.
ECJ, 4 October 2018
Payments in the 22nd century: future starts today?
An EBA keynote speech by Yves Mersch, Member of the Executive Board of the ECB talked about the future of payments. They highlighted that instant payments, including schemes like TARGET instant payment settlement (TIPS) launching in November 2018, meant European market players could now become leaders in innovation, based on European standards.
EBA, 3 October 2018
CPMI releases latest Red Book payments statistics in new interactive format
The Committee on Payments and Market Infrastructures (CPMI) published new data on payments and financial market infrastructures through to end-2017. Using a new methodology published in August 2017, the statistics now include more information on the role of non-banks, online and contactless payments and fast payments. The new methodology also clarifies how statistics on debit and credit cards should be compiled, and which retail cashless payments count as domestic and which as cross-border.
CPMI, 27 September 2018
New and updated SEPA guidance
Guidance and other materials on the Single European Payments Area have been updated and added by the European Payments Council (EPC). The following was published:
- updated guidance on reason codes for SEPA Direct Debit R-transactions;
- guidance on reason codes for SEPA Credit Transfer R-transactions;
- updated guidelines for the appearance of mandates in the SEPA Direct Debit schemes;
- updated Creditor Identifier Overview;
- clarification paper on SEPA Direct Debit Core and SEPA direct Debit Business-to-Business rulebooks;
- clarification paper on SEPA Credit Transfer and Instant Credit Transfer rulebooks;
- guidance on reason codes for SEPA Instant Credit Transfer R-transactions; and
They can all be downloaded from their document library which can be found here.
EPC, 18 September 2018
Payment, clearing and settlement operators meet on global cyber-resilience
The Bank for International Settlements (BIS) published a press release on a roundtable event in Paris which key global and regional payment, clearing and settlement operators attended. Continued collaboration between countries and preparation for and responses to cyber-attacks particular on cross-border transactions were discussed.
BIS, 14 September 2018
ECB opinion on a proposal for a regulation on certain charges on cross-border payments in the Union and currency conversion charges
The proposed regulation intends to provide all citizens and companies in the Union transferring euro cross-border, whether between euro area and non-euro area Member States or between non-euro area Member States, with the low levels of fees which are currently available in respect of domestic payments made in the official currency of a Member State. The European Central Bank (ECB) made a number of observations in its opinion which include the scope of provisions relating to currency conversion charge. In particular the ECB pointed out:
- the provisions of the proposed regulation relating to currency conversion charges should apply to cross-border payments in euro only where the currency of the payment account is not euro or where the PSPs of the payer and the payee, or of the payee only, are located outside the euro area;
- the currency conversion provisions should cover the possibility of a merchant providing the currency conversion service independently of a PSP;
- it could be made clear whether 'alternative currency conversion services' refer to those offered by the PSP and its affiliates, and, if so, the extent of the obligation of the PSP to search for and advertise services offered by its direct competitors, and whether currency conversion services could be offered by non-regulated providers; and
- the transitional period for compliance with transparency obligations in respect of the full cost of currency conversion services should be reduced to 12 months from the proposed regulation's entry into force.
ECB, 4 September 2018