by Genevieve Marjoribanks, Head of Policy, PSR

The COVID-19 pandemic has delivered a seismic shock on a global scale and it’s now up to all of us - regulators, government, industry and consumer groups – to respond accordingly.

At the PSR, we’re striving to ensure that payment systems work well for everyone now and in the future. Whether protecting access to cash in isolated communities or helping to prevent authorised push payment (APP) scams, we are working to support the smooth functioning of the UK economy during one of its biggest ever challenges.

The nation’s cash infrastructure is already having to adapt to the demands placed on it by the COVID-19 pandemic. Safeguarding people’s ability to access cash therefore remains one of our highest priorities. 

We are aware that COVID-19 could have a sizable impact on cash use so we’re encouraging banks, retailers, ATM operators and deployers to find innovative ways to maintain access to cash and, where this isn’t possible, offer effective alternatives.

Throughout these testing times, we will continue to work with the Financial Conduct Authority, HM Treasury, and the Bank of England, as a member of the Joint Authorities Cash Strategy (JACS) group, to support access for consumers who need cash now, while developing sustainable long-term solutions.

I’m pleased to say that steps are already being taken that will make a real difference to the lives of vulnerable consumers at a time when they’re needed the most.

A service being rolled out by the Post Office will allow those unable to leave the house to call their bank, building society or credit union and order cash for collection from a local Post Office. The money can then be collected by a trusted friend, family member or carer, offering a safe and easy way to access cash.

Elsewhere, ATM operator LINK has announced that Barclays, NatWest, PayPoint and Sainsbury’s Bank are supporting a pledge to maintain free-to-use ATMs despite a drop in demand caused by lockdown provisions. The initiative provides a guarantee that communities faced with losing access to cash will have free ATMs replaced by LINK members. 

We mustn’t allow the voices of local communities to be drowned out by the din of global developments. Our actions must reflect their needs. Where access to cash becomes impractical or even dangerous, digital solutions should be found that make up the shortfall.

We have, therefore, welcomed the raising of the limit on contactless card payments, a measure which will make it easier for people to pay for their shopping without having to handle cash or touch a point-of-sale (PoS) terminal. Coupled with this, innovations like Starling Bank’s Connected card allow account holders to give someone they trust a second debit card to buy groceries and other essential items for them. 

Even in testing times, the financial sector can innovate, not only offering vital lifelines to consumers in need, but also building bridges between generations and taking important strides forward for financial inclusion.

Helping to tackle payment fraud is another issue we take very seriously.

Fraudsters will likely try to exploit the current crisis in any way they can, including using APP scams to steal people’s money. 

APP scams happen when someone is tricked into sending money to a fraudster posing as a genuine payee. These types of scams can have a devastating impact on the people who fall victim to them so we’re working with the payments industry on several key measures designed to tackle this perfidious form of fraud. 

We’re supporting the development and implementation of the Contingent Reimbursement Model (CRM) Code which offers consumers and businesses better protection against APP scams while ensuring blameless victims are reimbursed. We also required members of the UK's largest banking groups to implement Confirmation of Payee (CoP) - a name-checking service designed to prevent misdirected payments. 

We are committed to getting the right result for everyone and our work tackling APP scams is already bearing fruit. Lloyds Bank recently announced that instances of APP scams among customers using CoP fell by 31% following the implementation of the service. We’re looking forward to seeing the outcomes the other banks are experiencing as a result of the implementation of this vitally important anti-fraud measure. 

However, this is just the beginning and more can still be done. Current APP scam reimbursement figures suggest that outcomes are not where we want them to be. 

The UK benefits from a payments industry that innovates fast and, under the CRM Code, it has all the tools it needs to improve outcomes. We will be monitoring the situation closely to make sure these results are achieved.

As and where appropriate, we want to see all payment service providers, big and small, signed up to the code, implementing CoP and giving their customers world-leading levels of protection.  

The COVID-19 pandemic has had a devastating effect on the people of the world. Now public bodies and industries have a responsibility to help them recover. In the payments sector, we need to ensure the systems consumers and businesses rely on are fit to face unprecedented challenges. At the same time, we must prevent people from being preyed upon by criminals when they are at their most vulnerable. 

Now more than ever we need industry to innovate in the best interests of everyone who uses payment systems. If we don’t demonstrate our agility, resilience and expertise now, then when?