2 Amendment of the Payment Services Regulations 2017

(1) The Payment Services Regulations 2017 are amended as follows.

(2) In regulation 63(5)(a) (application of Part 7)—

(a) after “83 (revocation of a payment order),” insert “86(2A) to (2D) (payment transactions to a payment account),”;

(b) after “92 (defective execution of payee-initiated transactions)”, for “and” substitute “,”;

(c) after “94 (liability for charges and interest)” insert “and 94A (liability for charges and interest as a consequence of delay under regulation 86(2B))”.

(3) In regulation 85 (application of regulations 86 to 88)—

(a) in paragraph (1), after “88” insert “, except paragraphs (2A) to (2D) of regulation 86,”;

(b) after paragraph (1), insert—

(1A) Paragraphs (2A) to (2D) of regulation 86 (payment transactions to a payment account) apply to any payment transaction which is—

(a) authorised in accordance with regulation 67 (consent and withdrawal of consent);

(b) executed wholly within the United Kingdom in sterling; and

(c) not initiated by or through a payee.

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(4) In regulation 86 (payment transactions to a payment account)—

(a) in paragraph (1), after “paragraphs 2” insert “, (2A) to (2D)”;

(b) after paragraph (2), insert—

(2A) Paragraph (2B) applies where the following conditions are met—

(a) the payer’s payment service provider has established that there are reasonable grounds to suspect a payment order from a payer has been placed subsequent to fraud or dishonesty perpetrated by a person other than the payer; and

(b) such grounds are established by no later than the end of the business day following the time of receipt of the payment order.

(2B) Subject to paragraph (2C), the payer’s payment service provider may delay crediting the amount of the payment transaction to the account of the payee’s payment service provider for the purpose of contacting the payer or other relevant third party to make further enquiries in order to establish whether it should execute the payment order.

(2C) The delay referred to in paragraph (2B) must be no longer than necessary to achieve the purpose described, and in any event, no longer than the end of the fourth business day following the time of receipt of the payment order.

(2D) Where a payment service provider delays a payment order under paragraph (2B)—

(a) the payer’s payment service provider must notify the payer of—

(i) the fact of the delay;

(ii) the reasons for the delay; and

(iii) any information or action required of the payer to enable the payment service provider to decide whether to execute the order;

(b) the notification under sub-paragraph (a) must be given or made available in an agreed manner and as soon as possible, and in any event by no later than the end of the business day following the time of receipt of the payment order;

(c) the requirement in sub-paragraph (a) does not apply to the extent complying with it would be otherwise unlawful.

;

(c) in paragraph (3)(a), after “regulation 85(1)” insert “or regulation 85(1A)”.

(5) After regulation 94 (liability of payment service provider for charges and interest), insert—

Liability of payment service provider for charges and interest as a consequence of delay under regulation 86(2B)(94A) A payment service provider is liable to its payment service user for—

(a) any charges for which the payment service user is responsible; and

(b) any interest which the payment service user must pay,

as a consequence of a delay to the execution of a payment order in reliance on regulation 86(2B), irrespective of whether the payment order is ultimately executed.

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