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NBU to Enhance Protection of Payment Card Users

NBU to Enhance Protection of Payment Card Users

The National Bank of Ukraine intends to enhance the protection of the rights of payment card users. To do this, the central bank has proposed introducing the following requirements that will apply in cases where customers complain that a money transfer they did not authorize was made:

  • after receiving notice of this from a customer, the issuing bank must restore the balance of the customer’s account to what it was before the transfer was made no later than the following business day (except where the bank has good reason to believe that the customer was not acting in good faith, in which case the bank must notify the relevant law-enforcement authorities)
  • a payment card user is liable for all of the losses related to a transfer they deny making if a bank can prove that an action taken by the user, or a failure to take action, resulted in the loss of money, or the unauthorized use of the PIN code, or of any other information that makes it possible to initiate payments
  • an issuing bank has the right not to reimburse a user if the amount in question does not exceed 20 tax-free minimum incomes of an individual (currently about UAH 350), if the transfer the user denies making involved a lost, stolen or misused payment card and/or payment card details, and if the user notified the bank of the card being lost or card details being stolen or misused only after the transfer was made.

The regulator also plans to update the procedure for issuing payment cards and operations that involve payment cards, bringing it into line with international payment practice, in particular by:

  • requiring that banks specify the procedure for issuing and giving payment cards to users in the relevant payment card agreements
  • authorizing bank agents to identify/verify users, and to give payment cards to users
  • allowing independent professionals (private individuals that are not hired workers or sole proprietors) to use corporate payment cards
  • allowing customers’ authorized representatives to collect payment cards on their behalf, without giving them the right to use these cards.

 With that in mind, the NBU has drawn up and presented for public discussion a draft resolution of the NBU Board that amends some of the central bank’s regulations (the “draft”). Among other things, the draft proposes amending Regulation No. 705, dated 5 November 2014, On the Procedure for Issuing Electronic Payment Instruments and Conducting Transactions with Such Instruments approved by NBU Board Resolution.

An analysis of the regulatory impact from the draft.

You can send your comments and suggestions regarding the draft by 17 June 2019 to the central bank’s mailing address or email.

Mailing address: 9, Instytutska St., Kyiv, 01601, National Bank of Ukraine, Payment System and Innovative Development Department.

Email: 22SPRA@U1H0, [email protected].

Please be reminded that payment card users should, under no circumstances, disclose their payment card details (such as the card’s expiry date, CVС2/CVV2 codes, and PIN code), their personal details, web banking login and password, or one-time passwords used for additional authorization.

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