FCA Consultation Paper Proposing Changes to SCA-RTS and guidance for Payment Services and Electronic Money

By Kyte Ekstrom | E Money, FCA Regulation, FinTech, News, Uncategorized | 0 Comments

If you are thinking what the hell is an SCA or a RTS, and do I really need to care or read this? The answer is, on this rollercoaster ride through the horror hall of Covid-19 and the ever changing landscape of fintech, with fraudsters waiting in the shadows to jump out at anytime, can you afford not to? That doesn’t mean that you need to read the whole 16 page document with accompanying appendixes! We’ve distilled the entire FCA paper into a short and easy tea-cup ride experience, without the side effects of nausea or vertigo.

So buckle up, get comfy and let’s begin!

Consultation paper CP21/3 on the proposed changes to RTS (Regulatory Technical Standards) on SCA (Strong Customer Authentication) explores changes to the FCA’s guidance on payment services and electronic money. The FCA are taking this opportunity to amend their guidance on prudential risk management and safeguarding in their Approach Document (AD), and making general updates to the FCA’s Perimeter Guidance Manual (PERG).

The FCA explains that the amendments aim to address barriers to the future success and adoption of open banking as it grows in the UK, as well as supporting competition and innovation in the payments and e-money sector. The amendments will also reflect the UK’s withdrawal from the EU.

The FCA’s proposals include:

  • A new SCA exemption being added to apply when customers access their account information through an account information service provider.
  • Requirement changes for publishing interface technical specifications, availability of testing facilities and fallback mechanisms by account providers.
  • Single and cumulative transaction thresholds being increased for contactless payments, from £45 to £100, and from £130 to £200 respectively.

The consultation paper will be particularly pertinent to Payment service providers (PSPs) and e-money issuers, as well as trade bodies representing them. The FCA’s proposals will affect credit institutions providing payment services and/or issuing e-money, as well as payment institutions (PIs), e-money institutions (EMIs) and registered account information services providers (RAISPs). The consultation paper may also be of interest to businesses providing payment services under exclusions of the Payment Services Regulations 2017 (PSRs)/Electronic Money Regulations 2011 (EMRs).

The section of the consultation paper relating to contactless payments, will close on 24 February 2021, the rest will close on 30 April 2021.

If you are feeling a sense of FOMO (just to add another acronym in there) and want to read more, click on the links below.

FCA Full SCA-RTS Consultation Paper

CP21/3 response form

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