The Payments Association has urged the new economic secretary to reduce the mandatory APP fraud reimbursement maximum of £415,000 to £30,000.

In a letter to Tulip Siddiq, the association has yet again expressed concerns from non-bank members that the Payment Systems Regulator’s (PSR) policy will “stifle innovation” and undermine competition.

It also warned that the move could drive higher levels of de-banking, particularly amongst vulnerable or underbanked communities.

The move comes after the organisation, which represents 300 payments companies in the UK, EU and Asia, called for the immediate delay of new rules from the PSR, including its APP reimbursement scheme, following the resignation of the authority’s managing director (MD) last month.

Chris Hemsley, who was first appointed MD in 2019, officially stepped down from his role in early June.

At the time, the Payments Association said that the reimbursement maximum should be reduced because the average scam costs businesses £11,000 and members of the public around £1,500.

It explained that a recommended mandatory reimbursement threshold of £30,000 is still more than double the average scam for businesses and 20x the average scam for consumers.

The PSR’s mandatory reimbursement scheme is set to come into force on 7 October.

“We appreciate Labour’s strong words on the importance of tackling fraud, but these must be mirrored by actions," said Tony Craddock, director general of The Payments Association. "Fraud is an issue that impacts every department of state, but as there is no obvious departmental lead."

He continued: "It is everybody’s problem and nobody’s priority. Hence, we would welcome the appointment of a dedicated Minister to coordinate cross-departmental actions. It is critical that anti-fraud measures are tackled in the round, with all parties bearing some responsibility: government, law enforcement, payments providers, retail, the technology sector and consumers.”

The association has also said that adequate and six-monthly reviews should be carried out to understand the impact the reimbursement scheme has on economic growth, competition, innovation, and fraud.

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