The Payments Pipeline

Written on 8 Apr 2020

The payments industry is one of the fastest moving and innovative areas in financial services – with technology and regulation reshaping and redefining the sector at a rapid speed. The Financial Conduct Authority (FCA) is prepared for the challenge and has published a teaser on how regulatory change will  play out over the next two years.

Will 2020 bring fundamental change in the world of payments regulation? To help you stay ahead of these developments, here are the dates to be aware of in 2020 and beyond.

In light of Covid-19, naturally, we are already seeing the deferral of key regulatory workstreams and according to the FCA, it has received hundreds of requests for changes to its regulatory approach as a result of the pandemic.

If you would like to discuss any of these developments, please get in touch with one of our experts listed below.

2020

Date Description
14 March 2020

The Strong Customer Authentication requirements for online banking have applied since 14 September 2019 (with an adjustment period until 14 March 2020). For firms that haven’t met the requirements, and are facing further delays due to coronavirus, the FCA will consider on a case-by-case basis the appropriate further measures.

Further information from the FCA is here.

1 April 2020 Spending limit for contactless card payments will be increased from £30 to £45, with roll-out beginning from 1 April 2020.
3 April 2020 Deadline for responses to Money Laundering Steering Group’s text of proposed revisions to Parts I, II and III of its guidance on the prevention of money laundering and the financing of terrorism for the UK financial services.
19 April 2020

New disclosure requirements under the revised EU cross-border payments regulation (CBPR2) in respect of currency conversion services and in relation to online-initiated credit transfers are currently scheduled to come into force.

Note: In a letter to the European Commission and the European Banking Authority dated 27 March 2020, members of the European banking industry have requested the formal postponement or some flexibility in the application and enforcement of this requirement.

5 May 2020 Deadline for the responses to the European Banking Authority (EBA) consultation paper on the draft Guidelines on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions.
June 2020 The Payment Systems Regulator (PSR) is to publish the card-acquiring market review interim report.
26 June 2020 Deadline for responses to the European Commission’s consultation on a retail payments strategy for the EU.
30 June 2020 The EBA guidelines on information and communications technology and security risk management come into force.
30 June 2020 The PSR will not take any formal action in respect of delays to the introduction of CoP by directed Banks ahead of 30 June 2020 and will  keep these arrangements under review as the wider impacts of Covid-19 are better understood. Update here.
30 June 2020 UK and EU to have concluded equivalence assessments under their respective equivalence frameworks in accordance with the Political Declaration.
Q3 2020 The PSR to publish the final report on its market review into the supply of card-acquiring services.
1 July 2020 The transition period can be extended until either the end of 2021 or 2022, by one decision taken jointly by the EU and the UK before 1 July 2020.
1 July 2020 EBA’s amended guidelines (EBA/GL/2018/05) on fraud reporting under PSD2 will apply to the reporting of payment transactions initiated and executed from this date.
10 July 2020 Regulation 5(5)(c) of the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 in relation to anonymous prepaid cards comes into force.
10 September 2020 Deadline for the Secretary of State or the Treasury to establish centralised automated mechanisms identifying holders of bank and payment account and safe deposit boxes, as required by Regulation 6 of the Money Laundering and Terrorist Financing (Amendment) Regulations 2019.
14 September 2020 Compliance Point 3 under the managed rollout – deadline  for a scheme mandate by which all issuers and acquirers are to have adopted of 3DS 2.x; active testing across all merchants.
1 October 2020 Deadline for responses to:

  • the BoE, Prudential Regulation Authority and FCA co-ordinated consultation papers on new requirements to strengthen operational resilience in the financial services sector;
  • the FCA’s consultation paper on introducing a Single Easy Access Rate for cash savings; and
  • the FCA’s call for input on its proposals on how open finance could transform financial services.
November 2020 The EPC to publish updated versions of the EPC SEPA payment scheme rulebooks and associated implementation guidelines after considering change requests. These will enter into force in November 2021.
31 December 2020 The EBA’s enforcement deadline for SCA in card-not-present e-commerce transactions. The UK’s SCA enforcement deadline is 14 March 2021 (see below).
31 December 2020 The transition period is due to end.

2021

10 January 2021 Deadline for existing cryptoasset businesses which were carrying on cryptoasset activity immediately before 10 January 2020 to register with the FCA, or otherwise cease trading.
14 March 2021

Failure to comply with the requirements for SCA in card-not-present e-commerce transactions will be subject to full FCA supervisory and enforcement action as appropriate in accordance with the managed rollout.

On 31 March 2020, the FCA stated that the current challenges arising from Covid 19 are likely to affect the planned implementation of SCA for e-commerce, and the regualtor will work closely with the industry to agree any changes to the milestones and timelines that may be needed.

Review date in SCA RTS for EBA review of the reference fraud rates in the so-called TRA exemption and of the exemptions re: dedicated interfaces.

19 April 2021 New disclosure requirements under CBPR2 in relation to electronic messages come into force.
November 2021 Updated versions of the EPC SEPA payment scheme rulebooks come into force.