Innovate Finance welcomes U-turn on APP reimbursement scheme threshold

The independent industry body for UK FinTech has welcomed proposed changes to the threshold for reimbursement under upcoming APP rules from the Payment Systems Regulator (PSR.)

On Thursday, the PSR said it was consulting on a new cap for the scheme, which comes into force in October.

The UK payments watchdog previously set the maximum reimbursement value at £415,000, which will now likely be reduced to £85,000.

The move comes after industry sources recently told City AM that they expected there could be a U-turn on the regulator’s rules, including a potential delay to the launch date of the scheme or the reimbursement threshold.

Innovate Finance said the move represented an important achievement for Innovate Finance, its members and the “whole FinTech sector.”

But it went on to say that more needs to be done to improve the regime overall.

The organisation plans to continue monitoring other risks it has identified and feed real time data on these to the regulator and policymakers over the next few months.

It has said that the PSR must address concerns about implementation readiness, particularly in relation to claims handling and disputes, as well payments being disrupted, as firms move closer to the 7 October deadline.

The organisation is also concerned that the regulator is still proposing that many cases which British courts have judged as gross negligence – such as ignoring repeated warnings from their bank or lying about a payment – would still be eligible for reimbursement.

“Today’s review by the regulator demonstrates that they have listened to our repeated warnings about a high maximum reimbursement negatively impacting competition in the sector,” said Innovate Finance chief executive Janine Hirt. “We now need to see the same commitment from the PSR to review other details of the regime in order to guard against unintended consequences.”