Hungary’s National Bank Issues New Guidelines to Combat Payment Fraud

Preventing Fraud through Payment Services

The National Bank of Hungary has issued a new recommendation aimed at preventing fraud through payment services, setting out expectations for market participants and aiming to establish uniform jurisprudence. This move comes as electronic payment services have become increasingly popular in the digital space, leading to new forms of fraud.

Key Requirements for Payment Service Providers

• Establish clear framework contracts with clients that cannot include conditions that would hold customers responsible for unauthorized transactions.
• Notify customers when new cash substitute payment instruments are applied or registered and provide an opportunity for the customer to indicate why they initiated the application or registration.
• Establish mechanisms to withdraw suspected abuse orders as soon as possible after a customer reports an issue and recover any affected payment transactions.

Implementation Timeline

Payment service providers will be required to implement these measures from January 1, 2024, at the earliest. The National Bank of Hungary will monitor their effectiveness through control and monitoring activities.

Goals and Objectives

The new guidelines aim to:

• Support the application of law by market participants
• Establish a uniform approach to preventing fraud in Hungary’s payment services sector
• Ensure effective fraud prevention mechanisms are in place without significantly decreasing customer experience, taking into account the risks involved.