PSR lauds results of APP fraud reimbursement policy

Recent data from the UK’s Payment Systems Regulator (PSR) shows that new fraud reimbursement rules are successfully changing how financial institutions handle Authorized Push Payment (APP) scams. For retailers and lenders, this signals a shift in liability and a tighter regulatory grip on payment security. The policy requires banks and payment providers to reimburse victims of fraud in most cases, which has forced firms to significantly upgrade their fraud detection technology. As a result, the industry is seeing fewer successful scam attempts and higher recovery rates for stolen funds. While this report focuses on the UK market, it serves as a critical blueprint for what US-based merchants and BNPL providers should expect regarding future consumer protection trends. Regulators are increasingly holding the 'rails' of the transaction—the lenders and payment processors—accountable for customer losses. If you offer direct-to-consumer financing, expect your lending partners to tighten their security protocols. This might include more friction during the checkout process, such as multi-factor authentication or identity verification. While more friction can sometimes lower conversion rates, the trade-off is a more secure ecosystem with fewer chargebacks and disputed transactions that can hurt your bottom line.

Source: Finextra — Lending

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