On 1 July 2026 the UK Payment Systems Regulator published the first independent verdict on its mandatory reimbursement regime for authorised push payment (APP) fraud, and the verdict was blunt: it works. Losses are down, more victims are made whole, and the rule that puts the bill on payment firms is not going away.
The scheme, live on Faster Payments since October 2024, forces sending and receiving firms to split the cost of reimbursing scam victims. Economists at Frontier Economics, commissioned by the PSR, found APP fraud losses have fallen by an estimated £73 million a year, with nearly 35,000 fewer scams and no sign of the market exits or reckless consumer behaviour that critics had predicted.
The liability model is proven, and regulators reuse what works
For payment firms the headline is not the £73 million. It is that a hard liability shift, dismissed as unworkable two years ago, now carries an official evidence base. Regulators extend models that survive scrutiny. Any firm still deciding how much to spend on catching fraud before it becomes a loss should read this as the direction of travel, not a one off, and the same logic that rewards strong customer authentication applies here.
Why it matters
The PSR just proved that making firms pay changes behaviour. When “firms are investing in prevention” is the regulator’s own success metric, weak fraud controls stop being a cost decision and become a compliance exposure.
The review also flags the catch: outcomes still vary depending on which firm a victim banks with. The PSR will consult before the end of 2026 on tightening that inconsistency, which means the bar rises again for firms whose reimbursement handling lags the field.
- Payment Systems Regulator, “Payment fraud falls by £73m following PSR reimbursement scheme,” exact page, 1 July 2026. First reported by Finextra.