Banks and payment companies have sent several hundred cases into the live platform from October through to February, a fraction of the tens of thousands of incidents in that time, according to two people familiar with the matter, who asked not to be named as the data wasn’t public.

The slow uptake comes at a crucial time for the Payment Systems Regulator, which is one of several watchdogs under pressure to do more to support the economy, as ministers consider scrapping some financial regulators they see as obstacles to growth. The PSR’s managing director Chris Hemsley abruptly left in June, while Sky News reported last week that the government is weighing whether to fold the agency into the Financial Conduct Authority. 

The PSR’s reimbursement claims management system is a key part of Britain’s new rules to tackle an explosion in online scams. Since Oct. 7, payment providers have been required to refund so-called authorized push payment fraud, with the cost split between the institutions sending and receiving the fraudulent payment. 

While the new system allows firms to share data more easily, companies are still free to handle claims on their existing systems, after the PSR delayed plans to make the new platform mandatory. 

The largest banks and fintechs currently use a system operated by industry body UK Finance, which is where the majority of claims are still being processed. Many smaller firms have not joined the old system, meaning some cases have to be resolved across multiple platforms, or directly between companies.

Pay.UK, the organization running the new refund system on behalf of the PSR, had onboarded just 558 companies by February, meaning it fell short of its goal of bringing roughly 1,500 firms online by the time the rules changed back in October, according to the people. 

David Morris, chief operating officer for Pay.UK, said the group’s “reimbursement claims management system benefits will evolve to provide more automated, data-driven insights, strengthening fraud prevention across the financial sector” as more companies sign up to use it.

The PSR said in an emailed statement that while the majority of firms are using the old system to handle cases, consumers are benefiting from the new reimbursement rules overall. 

Financial firms complained last summer they were unprepared for the changes and one industry group called for a further year to get ready. The maximum refund was cut from £415,000 to £85,000 after the industry argued the costs would make the UK less competitive.

There were 252,626 victims of authorized push payment fraud in 2023, according to the PSR’s data. Criminals are tricking people into sending money for fake goods or services, often luring them through social media posts. 

David Geale, interim managing director of the PSR, is also interim executive director of payments and digital assets at the Financial Conduct Authority. 

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