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Catch up on some of the stories our payments compliance analysts have covered lately, and stay up-to-date on the latest news.

Hong Kong Ushers In New Stablecoin Regime

The Legislative Council has passed a stablecoins bill as part of a broader push to tighten oversight of crypto-assets that mirrors other international compliance rules.

The compels any person or entity issuing a stablecoin linked to the value of fiat currency, either in Hong Kong or referencing the Hong Kong dollar abroad, to obtain a licence from the Hong Kong Monetary Authority (HKMA).

Hong Kong’s regime echoes that of Singapore, especially with its focus on issues such as risk management and reserve requirements, and appears to align with the stablecoin elements of the EU’s Markets in Crypto-Assets (MiCA) Regulation in terms of licensing and operational requirements.

Indeed, in a similar statement to that issued by EU officials at the time of MiCA being negotiated, Christopher Hui, the secretary for financial services and the Treasury, stated that the new regime “adheres to the ‘same activity, same risks, same regulation’ principle, with a focus on a risk-based approach to promote a robust regulatory environment”.

“This is not only in line with international regulatory requirements, but also lays a solid foundation for Hong Kong’s virtual asset market, which, in turn, promotes the sustainable development of the industry, protects users’ rights and interests, and strengthens Hong Kong’s status as an international financial centre,” the government official said.

India Launches 'Financial Fraud Risk Indicator' To Tackle UPI Scams

The tool is intended to improve data sharing between the Department of Telecommunications (DoT), banks, and Unified Payment Interface (UPI) platforms in a bid to tackle digital payment fraud.

The (FRI) is designed to alert banks, UPI service providers and financial institutions about mobile numbers associated with high risk of financial fraud.

“DoT is committed to prevent misuse of telecom resources by implementing national level technology driven solutions and collaborating with stakeholders, thus ensuring a secure and safe telecom ecosystem for all citizens,” the government department said in a press release.

“DoT continues to engage with financial institutions and digital payment platforms to further optimize alert mechanisms and reduce response time.”

Developed under the DoT’s Digital Intelligence Platform (DIP), the FRI provides real-time, risk-based alerts that classify mobile numbers as medium, high or very high risk.

These assessments are based on intelligence gathered from multiple sources, including the National Cybercrime Reporting Portal (NCRP), the DoT’s own Chakshu platform, and data that has been shared by banks and law enforcement.

With UPI being India’s most popular payment method, accounting for billions of transactions monthly, officials say the FRI tool could prevent large-scale losses and protect millions of users from falling victim to scams.

BaFin Relaxes PSD2 Interface Rules For Card-Issuing PSPs

Germany’s financial regulator BaFin has announced that it will temporarily relax enforcement of certain technical and reporting requirements under the revised Payment Services Directive (PSD2) for account-servicing payment service providers (ASPSPs).

In a recently published , BaFin said that until further notice it will not object if ASPSPs do not provide a dedicated technical endpoint for confirming the availability of funds to card-issuing payment service providers (PSPs).

The regulator has also said that it will refrain from enforcing the requirement for quarterly statistics to include the daily average response time for such fund confirmation requests.

The move provides breathing room for PSPs grappling with implementation of the access and reporting rules laid out in Germany's local legislative regime, the Payment Services Supervision Act (ZAG) and the EU’s regulatory technical standards under PSD2.

Manipulation-Based Scams On The Rise In Sweden, Warns Regulator

The Swedish financial watchdog has announced that payments fraud is declining overall, but says the use of tactics such as social engineering is increasing, echoing other countries in Europe and elsewhere.

Fraud involving payment services in Sweden in the second half of 2024, although it remains at historically high levels, according to new figures from the Swedish Financial Supervisory Authority, known locally as the Finansinspektionen.

Data by the regulator reveals that during the period from July to December 2024, fraud losses totalled SEK806m ($83m), down from SEK899m ($92m) in the first half of the year.

The number of reported fraud cases also declined slightly, from 143,251 to 138,660.

However, these numbers remain significantly higher than in H1 2021, when the fraudulent amount totalled SEK424m ($44m) — this equates to an increase of almost 90 percent.

Similarly, the number of frauds since then has jumped by 66 percent, considering the amount in that period was 83,549.

UK Government Moves To Tame 'Wild West' BNPL Market

HM Treasury has announced plans to regulate buy now, pay later (BNPL) lending, aiming to boost consumer confidence and give firms the certainty they need to innovate, grow and invest.

The plans will see BNPL firms brought under the aegis of the Financial Conduct Authority (FCA), with amendments to the 50-year-old Consumer Credit Act, the government said on Monday (May 19).

At the same time it also launched a two-part consultation into the legislative amendments, with the first consultation phase set to close on July 21, 2025.

BNPL has grown rapidly in the UK, with an extra 2m people using the product since 2022. As the BNPL market has boomed, protection for consumers has become a more important issue for the industry and government alike.

Emma Reynolds, economic secretary to the Treasury, said the new rules would protect shoppers from debt traps and give the sector the certainty it needs to invest, grow and create jobs.

She said: “Buy-Now, Pay-Later has transformed shopping for millions, but for too long has operated as a wild west — leaving consumers exposed.”

The government believes that by removing outdated and confusing rules, and shifting oversight to the FCA’s more flexible system, unnecessary burdens on BNPL businesses will be cut while consumer protections will be strengthened.  

Charles Rogers, senior financial services solicitor at Harper James, said the regulations were a “much-needed step forward” in a market which has rapidly grown, outpacing consumer awareness and regulatory oversight.

Rogers said: “This change gives the industry the clarity it needs to innovate responsibly.

He added: “Regulation does not have to stifle progress — in fact, it often provides the foundation for sustainable growth. Firms that embrace the new regime will be better positioned to build trust with their customers and to offer products that genuinely support financial wellbeing.”

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