Unmasking How Fraudsters Target UK Consumers in the Digital Age / PSR
On December, 2024, The Payment Systems Regulator (PSR), a British non-governmental organization which ensure that the payment systems are operated and developed in a way that considers and promotes the interests of all the businesses and consumers that use them, published a document about how fraudsters target UK consumers in the digital age.
Authorised push payment (APP) scams happen when a scammer tricks someone into sending a payment to an account outside of their control. APP scams remain a huge source of concern with millions of pounds being lost each year and a devastating impact left on victims.
Preventing authorised push payment (APP) scams is one of the PSR top priorities. APP scams cause immense suffering and harm to consumers and society, damage confidence in payments and lead to permanent loss of trust in institutions.
While progress is being made, APP scams remain a serious issue. Greater data sharing and collaboration across industries is essential to stop scams earlier in their lifecycle. Tackling these scams at the source will reduce harm and result in better outcomes for consumers. The PSR is calling on technology, telecoms, and social media platforms to work with payment firms to close down vulnerabilities that fraudsters exploit.
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Recommendations to Promote Alignment and Interoperability Across Data Frameworks Related to Cross-border Payments / FSB
On December 12th, 2024, The Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, published its recommendations about promoting alignment and interoperability across data frameworks related to cross-border payments.
Based on the positive feedback received during consultation, this report sets out final recommendations for promoting alignment and interoperability across data frameworks (i.e. the laws, rules, and regulatory requirements for collecting, storing and managing data) applicable to cross-border payments. The recommendations aim to mitigate unintended frictions that may pose significant challenges to improving the cost, speed, transparency and accessibility of cross-border payments. At the same time, they uphold the underlying objectives of data frameworks (such as preserving the security of transactions, meeting anti-money laundering and combating the financing of terrorism (AML/CFT) and sanctions objectives, and protecting the privacy of individuals).
To help ensure that the recommendations are taken forward in a coordinated manner, the FSB will establish a Forum on Cross-Border Payments Data bringing together a diverse set of public sector stakeholders relevant to cross-border payments, including payments, AML/CFT, sanctions, and data privacy and protection experts.
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Study on the payment attitudes of consumers in the euro area (SPACE) – 2024 / ECB
On December, 2024, the European Central Bank (ECB) issued a study on the payment attitudes of consumers in the euro area, which reveals a continuing shift in how euro area consumers make payments. While cash remains the most frequently used payment method at point-of-sale (52% of transactions) and for person-to-person payments (41%), its use continues to decline as digital payments grow. The study collected data from 18 euro area countries directly, while Germany and the Netherlands conducted their own harmonized surveys.
Online payments have seen significant growth, now accounting for 21% of day-to-day payments (up from 17% in 2022), with cards being the preferred online payment method at 48% of transactions. In terms of value, cards dominated point-of-sale transactions at 45% compared to cash’s 39%. The study found that 93% of consumers hold payment accounts and 92% own payment cards, though notably, about 9% of respondents reported needing assistance with digital payments.
Despite the digital trend, cash remains important to euro area consumers, with 62% considering it important or very important to have cash as a payment option – an increase from 60% in 2022. Most consumers (87%) found it easy to access ATMs or banks, though satisfaction decreased slightly from 2022. The study highlighted some ongoing challenges, with 24% of consumers reporting that their preferred payment method wasn’t always available at physical locations, emphasizing the need for maintaining both cash and digital payment options while ensuring accessibility for all consumers.
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Regulating cryptoassets: Admissions & Disclosures and Market Abuse Regime for Cryptoassets / FCA
On December 16th, 2024, the Financial Conduct Authority (FCA), which regulates the financial services industry in the UK, published Discussion Paper (DP) outlining proposed regulations for cryptoassets, specifically focusing on Admissions & Disclosures (A&D) and Market Abuse Regime for Cryptoassets (MARC). The paper follows the government’s announcement to bring cryptoassets under the FCA’s regulatory perimeter, with legislation planned to cover both fiat-referenced stablecoins and crypto trading activities simultaneously, rather than through a previously planned phased approach.
The A&D regime aims to establish requirements for cryptoasset admission to trading platforms and ensure adequate disclosure of information to protect consumers. Key proposals include mandating robust due diligence processes, implementing disclosure requirements for issuers and trading platforms, and establishing procedures for rejecting unsuitable cryptoassets. The regime also addresses the need for consistent information sharing across platforms and introduces mechanisms for filing documents through the National Storage Mechanism (NSM).
The MARC framework focuses on preventing, detecting, and disrupting market abuse in cryptoasset trading. It proposes regulations similar to those in traditional financial markets, including prohibitions on insider trading and market manipulation, while accounting for the unique characteristics of cryptoassets. The paper emphasizes the importance of cross-platform information sharing and implementation of appropriate systems and controls by trading platforms.
The FCA are asking for comments on this DP by 14 March 2025
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A Proposal for a Retail Central bank Digital Currency Architecture / BIS
On December 17th, 2024, the Consultative Group on Innovation and the Digital Economy (CGIDE) published a report. The report discusses four main processes in a retail central bank digital currency (CBDC) architecture.
The report outlines a hybrid model where central banks provide core CBDC infrastructure while private intermediaries deliver user-facing services. The architecture describes four key processes: user enrollment, CBDC creation (cash-in), CBDC destruction (cash-out), and intra-ledger transfers. The design allows for tiered know-your-customer (KYC) facilities, with stricter requirements for wallets with higher transaction limits and simpler requirements for basic wallets with more limited functionality.
The report also explores advanced capabilities that CBDCs could enable, including smart contracts, tokenization, and programmable payments. The proposed architecture aims to balance centralized control with broader access, incorporating privacy safeguards while ensuring compliance with regulatory requirements. The document emphasizes that while this represents one possible approach, different central banks may adopt alternative models based on their specific policy objectives and regulatory frameworks.
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