On 22 November 2024, the Financial Conduct Authority (FCA) published finalised guidance FG24/6: Guidance for firms that enables a risk-based approach to payments.
Background
The Payment Services (Amendment) Regulations 2024, which came into force on 30 October 2024, amended the Payment Services Regulations 2017 to extend the amount of time that a payment service provider (PSP) has to process an outbound payment where there are reasonable grounds to suspect fraud or dishonesty.
HM Treasury asked the FCA for guidance in support of those Regulations, to explain how it expects PSPs to apply these legislative changes (taking into account feedback from stakeholders). The FCA consulted, in GC24/5, on adding this guidance to its Approach Document, along with guidance on delaying inbound payments where a PSP suspects fraud.
The finalised guidance
Having considered feedback to GC24/5, the final guidance (which is set out in an updated version of the Approach Document) sets out:
- The requirements for delaying outbound payments and determining whether the threshold for ‘reasonable grounds to suspect’ has been met.
- How PSPs should use the payment delay window.
- Obligations on PSPs if they delay an outbound transaction.
- The treatment of suspicious inbound payments.
The updated Approach Document took effect from 22 November 2024.