Payment Services (Amendment) Regulations 2024 made

The Payment Services (Amendment) Regulations 2024 were made on 8 October 2024 and come into force on 30th October 2024¹. They were laid before Parliament on 9 October 2024 and extend to England and Wales, Scotland and Northern Ireland¹. The Treasury made them under sections 3(1) and 84(2) of the Financial Services and Markets Act 2023, and consulted the regulators as required by section 3(6) of that Act¹.

The regulations amend the Payment Services Regulations 2017, which set maximum time limits for firms to execute payment transactions². The new power applies to a payment transaction that is authorised in accordance with regulation 67, executed wholly within the United Kingdom in sterling, and not initiated by or through a payee¹.

Under the new regulation 86(2A), the power applies where the payer's payment service provider has established reasonable grounds to suspect that a payment order was placed after fraud or dishonesty by a person other than the payer, and those grounds are established by no later than the end of the business day following receipt of the order¹. The provider may then delay crediting the amount to the payee's provider to contact the payer or another relevant third party to make further enquiries about whether to execute the order¹. The delay must be no longer than necessary and in any event no longer than the end of the fourth business day following receipt¹.

Where a delay is used, the payer's provider must notify the payer of the fact of the delay, the reasons for it, and any information or action required of the payer, in an agreed manner and as soon as possible, and in any event by the end of the business day following receipt of the order¹. That requirement does not apply to the extent that complying with it would be otherwise unlawful¹.

A new regulation 94A makes the provider liable to its payment service user for any charges for which the user is responsible, and any interest the user must pay, as a consequence of a delay under regulation 86(2B), whether or not the order is ultimately executed¹.

Why it matters for households

From 30th October 2024, a bank or other payment firm handling a sterling payment sent within the UK can hold it for up to four business days if it suspects the payment followed fraud by someone other than the customer¹. This affects the payer, not the recipient: the money is not credited to the payee's provider during the delay¹. The customer must be told about the delay, the reasons for it and anything needed from them, normally by the end of the next business day¹. If the delay causes the customer charges or interest, the provider is liable for those amounts even if the payment is never executed¹. The regulations do not change the separate rules on refunds for authorised push payment fraud, and the sources do not state how the new power interacts with them.

What happens next

The regulations came into force on 30th October 2024¹. A full impact assessment is available from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ, and is published with the Explanatory Memorandum alongside the instrument². No further commencement steps are set out in the sources.