Executive Summary
- For the Singapore shopping company, launch Variant A conditionally, with a fresh customer decision for every purchase. Use a UK bank for customers in England and Wales and an Irish bank for customers in Ireland, each supplying its own debit account, credential and payment service. Keep the company’s role to shopping software and specified support. The implemented instruction flow must support that allocation. (Payment Services Regulations 2017 (PSRs 2017), SI 2017/752, regulation 2 and Schedule 1; Directive (EU) 2015/2366 (PSD2), Articles 3(j), 4(15) and Annex I.)
- A wrong item does not automatically make the payment unauthorised. The bank must investigate disputed payment authority; the merchant answers for its sales obligations; the software company answers for its own defective performance. More than one claim can arise from the same purchase. (PSRs 2017, regulations 67 and 75–77; European Union (Payment Services) Regulations 2018 (Irish PSRs), SI No 6/2018, regulations 88 and 95–98; Consumer Rights Act 2015, sections 49–54.)
- For a qualifying unauthorised debit payment, the payer’s bank must ordinarily refund by the end of the next business day after awareness. It cannot wait for the Singapore company’s investigation or recovery from the merchant. Authentication records alone do not necessarily prove consent. The statutory fraud exception and payer-liability rules require their own evidence. (PSRs 2017, regulations 75–77; Directive 2015/2366, Articles 72–74; Irish PSRs, regulations 96–98.)
- The UK and Irish payer-loss rules differ. Ordinary online goods purchases can engage the UK distance-contract protection against unauthorised-payment liability, except payer fraud. Ireland applies its own implementation of the PSD2 lost-instrument, fraud, negligence and authentication rules. An authorised debit-card purchase does not create a general bank guarantee of merchant performance under either regime. (PSRs 2017, regulation 77(4)(d)–(5); Irish PSRs, regulation 98.)
- A standing budget does not provide complete evidence of payment consent or an authentication exemption. Variant B requires a bank-agreed mandate, enforceable limits and a lawful authentication treatment for the actual payment method. Hold Variant C while it permits offline merchant or amount substitutions without a settled authority and payment-control design. (PSRs 2017, regulations 67, 69(3)(h) and 100; Directive 2015/2366, Articles 64, 66(3)(h) and 97; Delegated Regulation (EU) 2018/389, Articles 5 and 13–14.)
- A partner’s authorisation does not cover an independent payment service supplied by the Singapore company. Absence of fund holding is insufficient where the company actually initiates payments. Singapore also regulates specified arrangements for transfers between foreign countries, subject to its statutory exclusions. (PSRs 2017, Schedule 1, paragraph 2(j); Directive 2015/2366, Article 3(j); Payment Services Act 2019 (Singapore), section 5 and First Schedule.)
- Treat ordinary shopping as its actual AI use case. Autonomy alone does not put it in the AI Act’s high-risk categories, but applicable transparency and data duties remain. Complete a transfer assessment for each flow to Singapore, and provide human intervention where automated-decision rules require it. (Regulation (EU) 2024/1689, as amended by Regulation (EU) 2026/1744, Articles 2, 6 and 50 and Annex III; General Data Protection Regulation (GDPR), Regulation (EU) 2016/679, Articles 22 and 44–49; United Kingdom General Data Protection Regulation (UK GDPR), Articles 22A–22C.)
- Make the bank’s fraud-reporting channel available inside the product and directly. Contract for immediate receipt of reports, preservation of evidence, parallel investigations and compensation for the company’s own proven service failures. Complaint-response periods cannot postpone a statutory refund. (Financial Conduct Authority (FCA) Handbook, DISP 1.6.2AR; Irish PSRs, regulations 97 and 124; Consumer Rights Act 2015, section 54; Consumer Rights Act 2022 (Ireland), section 73.)
A defensible launch confines execution to a fresh customer decision
The proposed first release is Variant A for adult consumers habitually resident in England and Wales or Ireland. The agent proposes the basket and the customer approves each payment. Variant B would permit payment within a standing mandate and transaction limits; Variant C would add broad discretion to change merchants or amounts while the customer is offline.
For A, use two separate banking relationships: a UK-established authorised bank for the first cohort and an Ireland-established authorised bank for the second. Each customer contracts directly with the relevant bank for a funded payment account and a digital debit credential, without an overdraft or credit line.
The product should support one-off purchases of ordinary tangible goods from vetted UK or European Economic Area (EEA) merchants. For Ireland, require an EEA-established acquirer, the merchant’s provider for accepting and settling card payments, as well as an EEA merchant. For England and Wales, require a UK or EEA merchant and acquirer, with their establishments and the applicable payment route recorded. Merchants must accept orders and delivery to the customer’s country. Require a final charge in sterling for the UK cohort and euro for the Irish cohort, with no later currency conversion, tip, substitution or amount increase. Suggested product ceilings are £250 or €250 per purchase and £500 or €500 daily. Those amounts are operating choices, not legal thresholds.
The company should offer no subscriptions to merchants through the agent, open-ended preauthorisations, instalment credit, gift-card purchases, customer wallet or pooled refund balance. It may charge for its own software service as an ordinary supplier. It must not collect merchants’ sale proceeds or deduct its fees from customer settlement funds. These constraints reduce the number of payment services and consent patterns that need approval; they do not themselves create a statutory exclusion. (PSRs 2017, regulation 2 and Schedule 1; Directive 2015/2366, Articles 3–4 and Annex I.)
The customer supplies the stored credential to the bank’s vault. The Singapore company receives a reference that cannot be used to charge, replay or change a payment. It may prepare a basket and open a merchant or partner checkout session. The customer can inspect, correct or reject the basket before giving the payment instruction through the bank-controlled approval step. The merchant and its acquiring provider receive any usable payment token through the approved payment flow. The model cannot release that token or invoke a charge independently.
A displayed approval button alone is insufficient. If the company accepts the customer’s payment request under its own undertaking and its backend initiates the payment order, human approval can coexist with a regulated initiation service. The release decision therefore requires the actual contracts, interfaces and execution privileges to match the proposed software role. (Directive 2015/2366, Article 4(15); PSRs 2017, regulation 2 and Schedule 1, paragraph 2(j).)
Three contracts govern the instruction, the payment and the goods
The Singapore company’s consumer terms should promise the shopping service: applying the stated preferences, presenting the selected merchant and goods accurately, enforcing the agreed product limits, and securing its own systems. The bank’s separate account and card terms should identify the payment service, consent procedure, authentication process, reporting channel and statutory redress. The identified merchant’s sales terms govern the goods, price, acceptance, delivery and returns. An acquirer’s business contract with the merchant does not become the customer’s shopping contract merely because the acquirer handles settlement.
The checkout must identify the legal seller, product, quantity, delivery terms, final price and currency before the customer commits. It should show when the merchant accepts the order, including any acceptance-on-dispatch term. The ordering action must make the payment obligation explicit, and the customer must receive the required confirmation. An apparently valid merchant order does not cure failure to meet those consumer-contract requirements. (Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, SI 2013/3134, regulations 13–14 and 16 and Schedule 2; Consumer Rights Act 2022 (Ireland), sections 106 and 108–109.)
There is no additional AI counterparty. The relevant persons are the consumer, software company, bank, merchant and their actual intermediaries. In B or C, determine whether the company has authority to conclude the sale for the consumer and whether that authority extends to the particular goods, merchant and price. The shopping mandate and the consent procedure agreed with the bank can have different boundaries. A breach of the first does not necessarily invalidate the second. (PSRs 2017, regulation 67; Directive 2015/2366, Article 64; Irish PSRs, regulation 88.)
A Singapore choice-of-law clause does not displace mandatory consumer protections where the applicable consumer conflicts rule preserves them. UK and EU rules protect qualifying consumers when the trader directs activities to their country. Relevant home-forum rights can also survive a foreign jurisdiction clause. These rules do not themselves resolve whether an agent bound a principal to a third party: that agency issue falls outside Rome I’s scope and needs the applicable national law. (Assimilated Regulation (EC) No 593/2008, Articles 1(2)(g) and 6; Regulation (EC) No 593/2008, Articles 1(2)(g) and 6; Civil Jurisdiction and Judgments Act 1982, sections 15B and 15E; Regulation (EU) No 1215/2012, Articles 17–19.)
Authorisation, settlement and refund are different events
The transaction begins with the customer’s shopping instruction. The agent obtains an offer, checks the merchant and proposes a basket. At checkout, the final basket is frozen and the customer sees the merchant, exact total and currency. The bank obtains consent through its agreed procedure and performs strong customer authentication (SCA) where required. The subsequent card authorisation request passes through the merchant’s acquiring arrangements to the issuer. An issuer’s approval or reservation of available funds is distinct from the customer’s legal consent and from the merchant’s contractual acceptance. (PSRs 2017, regulations 67, 75 and 100; Irish PSRs, regulations 88, 96 and 120.)
Under the proposed account model, the bank holds the customer’s deposit before debit. Capture and settlement move value through the issuer, card scheme and acquirer to the merchant’s account according to the relevant arrangements. Authorisation may reduce the available balance before final posting. The Singapore company holds no purchase funds at any stage. The product should display separate statuses for customer approval, issuer authorisation, merchant acceptance and payment settlement, using the partner’s actual event definitions.
Cancellation has a time boundary. Before the relevant payment order becomes irrevocable, withdrawal can stop that instruction. Withdrawal of consent to a series also matters for future payments. Once an order is irrevocable, the company cannot promise that an app’s stop button will recall it. A merchant may still void an authorisation before capture; after settlement, a merchant refund, a scheme chargeback or a statutory bank refund follows a different route. (PSRs 2017, regulations 67 and 83; Directive 2015/2366, Articles 64(3) and 80; Irish PSRs, regulations 88 and 104.)
The customer’s bank must not make a statutory unauthorised-payment refund depend on successful recovery through that chain. If a payment initiation service provider (PISP) caused the unauthorised transaction, the account-servicing bank refunds the customer first and seeks the prescribed compensation from the liable initiator. Inter-firm indemnities address the eventual allocation of loss. (PSRs 2017, regulation 76(5); Directive 2015/2366, Article 73(2); Irish PSRs, regulation 97.)
Classify the complaint and preserve the refund deadline
In a mistaken purchase, suppose the consumer requested a blue coat but the proposed basket contains a red coat. If the customer can review and reject the displayed red-coat order, and then approves that order and payment, the bank may have executed an authorised transaction. The merchant may have delivered exactly what was ordered. The remaining questions concern cancellation and whether the company breached its selection or presentation obligations. An unhelpful recommendation is not automatically a payment-system failure. (PSRs 2017, regulations 67 and 90–92; Irish PSRs, regulations 88 and 111–113; Consumer Rights Act 2015, sections 49–54; Consumer Rights Act 2022 (Ireland), sections 53–62.)
Compromised credentials present a different case. If an attacker uses a payment token without customer consent, the bank must investigate authority under the payment rules. The same applies when the system substitutes a payee or amount outside the consent that the customer actually gave. A company security breach may create an additional claim against the company, while the bank’s refund obligation runs on its own timetable. The fact that the customer chose to use an agent does not, by itself, establish fraud or gross negligence. (PSRs 2017, regulations 74–77; Irish PSRs, regulations 95–98.)
Prompt injection must be analysed by its effect. Merchant content might manipulate the model into recommending a fraudulent seller, after which the customer approves the displayed payee and amount. That can be an authorised payment induced by deception, alongside defective software security. If the injected instruction instead bypasses approval, fabricates authority or changes the approved payment, the unauthorised-payment case is materially stronger. Technical labels cannot replace the evidence of what the customer approved. (PSRs 2017, regulations 67 and 75; Directive 2015/2366, Articles 64 and 72.)
Non-delivery after a valid order generally starts with the merchant’s sales obligations. It may support a card chargeback under the applicable scheme, but delivery failure alone does not establish a chargeback or bank-refund entitlement. A genuine merchant’s breach must also be distinguished from a fraudulent seller’s initial intention to obtain money without supplying goods. Both can involve non-delivery, but they engage different fraud and reimbursement conditions. (Consumer Rights Act 2015, section 28; Consumer Rights Act 2022 (Ireland), section 36; Payment Systems Regulator (PSR), APP Scams Reimbursement and Civil Disputes Guidance, September 2024, paragraphs 2.1–2.4.)
Disputed customer authority requires both records. The company must produce the original shopping mandate and every relevant change. The bank must establish the payment consent agreed under its own procedure. An instruction to spend up to £100 is not proof that a particular £95 payment to any merchant was authorised. Conversely, a breach of a private preference that was never a condition of payment consent does not necessarily make that bank payment unauthorised. (PSRs 2017, regulations 67 and 75; Irish PSRs, regulations 88 and 96.)
The payer’s bank must handle unauthorised-payment claims
For an alleged unauthorised payment, the payment provider must prove authentication, accurate recording and accounting, and absence of the relevant technical deficiency. Recorded use of the instrument does not necessarily establish that the payer consented or acted fraudulently or with gross negligence. A payment initiator carries the evidential burden for matters within its competence. The company must therefore deliver the underlying evidence promptly, even when the bank’s system records a valid token and successful authentication. (PSRs 2017, regulation 75; Directive 2015/2366, Article 72; Irish PSRs, regulation 96.)
The payer must normally notify the bank without undue delay after becoming aware and within 13 months after debit, subject to the statutory information exception. For an unauthorised debit transaction within scope, the UK bank must refund as soon as practicable and no later than the end of the next business day after awareness. The Irish rule requires an immediate refund with the same outer deadline. The bank must restore the account and relevant value date. (PSRs 2017, regulations 74 and 76; Directive 2015/2366, Articles 71 and 73; Irish PSRs, regulations 95 and 97.)
The exception permitting a delayed refund concerns the prescribed reasonable suspicion of fraudulent behaviour and the written notification required by the applicable regime. In the UK, the statutory wording expressly concerns the payment service user’s fraudulent behaviour. Suspecting the merchant of fraud, awaiting the app’s logs, or investigating possible gross negligence is not a general power to suspend the clock. The FCA’s current Approach explains that a provider may need to investigate gross negligence after refund, with any later reversal requiring the proper basis and notice. (PSRs 2017, regulation 76(3); FCA, Payment Services and Electronic Money: Our Approach, May 2026, paragraphs 8.207–8.210.)
For the EU, the Court of Justice confirmed on 15 October 2026 that alleged payer gross negligence cannot justify refusing the immediate refund of an unauthorised payment. Article 73 governs that initial refund; Article 74 addresses the later allocation of loss and possible recovery from the payer. The Court also identified payer fraud as the relevant fraud exception. This interpretation informs the Irish PSD2 regime; the UK result rests on its own legislation and FCA guidance. (N.O. v PKO BP S.A. (Tukowiecka), Case C-70/25, EU:C:2026:852, paragraphs 31–42 and 46–52; Irish PSRs, regulations 97–98.)
Payer liability must then be assessed under the correct national rule. Ireland generally caps specified pre-notification lost, stolen or misappropriated-instrument losses at €50, subject to exceptions. Fraud or an intentional or grossly negligent breach of the payer’s security duties can change that result. Protection also applies in the prescribed post-notification, unavailable-reporting and omitted-SCA circumstances. A provider cannot infer those disqualifying facts from the mere existence of delegation. (Directive 2015/2366, Article 74; Irish PSRs, regulation 98.)
The UK’s £35 provision is not a complete account of liability for this online-shopping model. Regulation 77(4)(d), read with paragraph (5), removes payer liability, apart from payer fraud, where the instrument is used in a qualifying distance contract. Ordinary online goods purchases can fall within that protection. Other protections concern undetectable instrument loss, losses caused by the provider’s staff, agents or outsourced entities, post-notification use and omitted required authentication. The precise contract and statutory exclusions still matter. (PSRs 2017, regulation 77(1)–(5).)
This analysis uses a debit account deliberately. The UK PSRs disapply specified unauthorised-payment provisions for payments using a regulated consumer-credit line. Adding a credit card or overdraft requires the Consumer Credit Act allocation to be checked separately. Qualifying credit purchases may also engage section 75 where the required debtor-creditor-supplier relationship and cash-price limits are met. That protection cannot be advertised for the proposed debit product or imported into every EU country. (PSRs 2017, regulation 64(3); Consumer Credit Act 1974, sections 75 and 83.)
Merchant refunds and software compensation remain separate remedies
For ordinary distance goods purchases, consumers generally have a cancellation period extending to 14 days after possession, subject to exclusions and the applicable conditions. The merchant’s reimbursement duty can interact with return of the goods or evidence of return. Non-conforming goods and failure to deliver create further remedies. If the customer authorised payment for the wrong item, these sales rights can still provide a practical route to recovering the price. (Consumer Contracts Regulations 2013, regulations 28–30 and 34; Consumer Rights Act 2015, sections 11, 19 and 28; Consumer Rights Act 2022 (Ireland), sections 21, 26–30, 36 and 111–118.)
For Irish online contracts carrying the statutory cancellation right, provide the required visible online cancellation function, confirmation step and durable acknowledgement. This applies to the software subscription where the statutory conditions are met, as well as relevant merchant and financial-service contracts. Cancelling a contract through that function does not itself reverse an irrevocable payment. (Consumer Rights Act 2022 (Ireland), section 115A, inserted by SI No 309/2026, regulation 6; Irish PSRs, regulation 104.)
The Singapore company should separately accept responsibility for its own software performance. In the UK, a service must meet the reasonable-care-and-skill standard, and qualifying information relied upon by the consumer can become binding. Repeat performance, price reduction and other preserved remedies must be considered; a subscription-fee refund will not necessarily satisfy a properly established damages claim. Mandatory protections and the fairness test constrain liability exclusions. (Consumer Rights Act 2015, sections 49–50, 54–57 and 62.)
For the proposed Irish paid digital service, contractual and objective conformity requirements apply, with remedies for non-supply and lack of conformity. Depending on the conditions, the consumer can require conformity, obtain a price reduction or terminate. The legislation also preserves other remedies, including damages, without double recovery. The sales price is not automatically recoverable from the company merely because the model made a poor choice: the promise, breach, causation and recoverable loss remain material. (Consumer Rights Act 2022 (Ireland), sections 49, 51–54, 60–62, 68, 71 and 73.)
Make the contract more useful than a generic model-accuracy disclaimer. Promise to compensate the customer for documented, unrecovered direct purchase loss and reasonable return costs caused by the company’s breach of the agreed selection, limit or security duties. Pay that compensation from the company’s own corporate funds. Coordinate subsequent merchant or bank recoveries to prevent double recovery, without making the customer exhaust those routes before receiving a remedy that is already due. This is a proposed contractual allocation of the company’s own failures; it does not make the company an insurer of every merchant.
Authorised fraud and account-payment rules depend on the rail
The launch’s debit-card route does not carry the UK mandatory authorised push payment reimbursement regime. That regime concerns qualifying domestic Faster Payments and CHAPS transactions under their respective requirements. An ordinary international transfer is also outside that domestic route. The location of the seller alone is inconclusive: an overseas merchant might receive a payment through qualifying UK accounts. Genuine civil disputes and fraud claims need separate assessment. (PSR, Specific Direction 20, as amended July 2024; Specific Requirement 1, corrected July 2024; Specific Direction 21; PSRs 2017, regulation 90(6)–(7).)
If account payments are added, assess the exact sending and receiving providers, rail and customer eligibility before promising reimbursement. For qualifying Faster Payments claims, the sending provider ordinarily reimburses within five business days, subject to the permitted information pause and 35-business-day closure limit. The mandatory maximum is £85,000 per claim, with the prescribed exceptions and possible excess. Those conditions are not a universal remedy for an offline bot’s purchase. The facts must establish the scheme’s fraud and payer requirements. (PSR, Specific Requirement 1, paragraphs 4.2–4.7 and 5.1–5.8; Maximum Level of Reimbursement Notice, 25 September 2024, paragraphs 1.1–1.3; Consumer Standard of Caution Notice, December 2023, paragraphs 1.5–1.9.)
Under PSD2, fraud inducing a payer-authorised transfer does not, by itself, trigger the unauthorised-payment refund duty. Other EU or national remedies may still apply. A correct payment to the instructed account may engage the unique-identifier rule rather than defective-execution liability. Euro credit transfers also require attention to the separate verification-of-payee regime. Where the prescribed verification failure by a provider causes a defectively executed transfer, the payer’s provider must refund without delay. A compliant name check does not establish that the seller will deliver genuine goods. (Directive 2015/2366, Articles 73–74 and 88; Regulation (EU) No 260/2012, Article 5c, inserted by Regulation (EU) 2024/886.)
Some authorised payee-initiated payments have their own refund rights where the original authorisation did not specify the exact amount and the charge exceeds reasonable expectations. Euro direct debits have a distinct statutory refund treatment. These rules cannot be carried across indiscriminately to customer-initiated card purchases or credit transfers. Each added method therefore needs its own consent, refund and scheme schedule. (Directive 2015/2366, Articles 76–77; Irish PSRs, regulations 100–101.)
The software classification depends on the act performed and its location
The company has its strongest software argument when it prepares the purchase proposal and the consumer independently instructs the bank through the controlled checkout. UK and EU technical-service exclusions cover supporting activities without possession of funds, but expressly exclude payment initiation and account information services. A payment initiator can be regulated while legally prohibited from holding the payer’s funds. “We never touch the money” therefore does not settle the perimeter. (PSRs 2017, Schedule 1, paragraph 2(j), regulation 69(3)(a); Directive 2015/2366, Articles 3(j) and 66(3)(a).)
The adverse characterisation is that the company undertakes to execute the customer’s purchasing instruction as its own payment service: it determines the payee and amount, accepts the request and sends the instruction against an account at another provider. A reusable credential, independent retry authority or power to substitute payment details strengthens that characterisation. Issuing must also be assessed if the company contracts to provide the personalised device or procedure used to initiate and process payment. Branding alone does not prove issuance. Where the company receives purchase funds or controls a customer balance, assess whether it operates a payment account, executes transactions or supplies remittance. (PSRs 2017, regulation 2 and Schedule 1; Directive 2015/2366, Articles 4(12), 4(14)–(15), 4(22), 4(45) and Annex I.)
There are material counterarguments. The FCA’s guidance excludes from its interpretation of payment initiation services (PIS) transmission of card details and a payment order without possession of personalised security credentials. Genuine commercial agency can also be relevant where the company is actually authorised to negotiate or conclude the sale solely for the payer or solely for the payee. The legal company can hold that authority; calling the machine an agent supplies none. Merchant-side obligations and actual representation must be examined before relying on this exclusion. (FCA Handbook, PERG 15.3, Q25B, and PERG 15.5, Q33A; PSRs 2017, Schedule 1, paragraph 2(b); Directive 2015/2366, Article 3(b).)
UK territorial scope is a separate issue. The FCA generally does not expect an overseas-incorporated and located provider, supplying services entirely from abroad over the internet, to fall within the UK authorisation requirement. Targeting UK consumers alone does not establish a UK payment-services authorisation breach. Actual UK establishments, personnel and service functions can change the analysis. An offshore position also supplies no status or statutory access rights as a UK-authorised payment initiator. (PSRs 2017, regulations 69 and 138; FCA Handbook, PERG 15.6, Q46.)
The bank’s authorisation covers the bank’s own permitted activities. If the company instead supplies a payment institution’s service as its agent, the relevant registration, disclosure and principal-responsibility rules need to be satisfied before use. Those payment-institution provisions are not a universal registration route for bank vendors. The proposed independent shopping service is not automatically bank outsourcing merely because checkout is hosted by a bank. Any support function actually outsourced by the bank must meet that bank’s applicable duties to control and supervise the supplier. The Irish bank retains responsibility for its technology dependencies under the Digital Operational Resilience Act (DORA). (PSRs 2017, regulations 34 and 36; PRA Rulebook, Outsourcing 2.1 and 2.1C–2.1D; Directive 2015/2366, Articles 19–20; Irish PSRs, regulations 30–31; Regulation (EU) 2022/2554, Articles 28–30.)
For a later account-payment product, Licentium’s analysis of provider-controlled open-banking checkout examines the difference between supplying checkout technology and undertaking initiation. The relevant product decision remains who receives the payer’s request, supplies the payment service and controls its release.
Standing mandates require defined authority and lawful authentication
Variant B can be lawful in a properly designed arrangement. UK and EU law permit consent to a series of payments through the agreed procedure. Define permitted merchants or payees, amounts, currency, frequency, cumulative spending, expiry, substitutions and revocation. Specify which constraints form part of the bank-agreed payment consent and which are separate software promises. That distinction determines the evidence and remedy when a constraint is breached. (PSRs 2017, regulation 67; Directive 2015/2366, Article 64; Irish PSRs, regulation 88.)
Strong customer authentication is a separate requirement. For relevant remote electronic payments, dynamic linking connects authentication to the amount and payee, subject to lawful exceptions. Changing those parameters invalidates the corresponding authentication code. A model’s access to one secret does not, by itself, establish authentication using the payer’s required independent factors. The bank must determine the applicable authentication or exemption treatment and retain the evidence. (PSRs 2017, regulation 100; FCA Technical Standards on Strong Customer Authentication, Articles 4–5 and 9; Directive 2015/2366, Article 97; Delegated Regulation 2018/389, Articles 4–5 and 9.)
The recurring-payment exemption concerns the same amount and same payee, with SCA when the payer creates, amends or first initiates the series. A trusted-beneficiary list also has specific creation and amendment conditions. A shopping budget or merchant-preference list does not satisfy those tests by description alone. Genuine payee-initiated debits under a mandate can have a different SCA treatment, including authentication at remote mandate setup. A new order triggered by the buyer’s agent is not automatically a subsequent debit initiated independently by the merchant. (Delegated Regulation 2018/389, Articles 13–14; FCA SCA Technical Standards, Articles 13–14; Directive 2015/2366, Article 97; FCA, Our Approach, May 2026, paragraph 20.9.)
Variant C should remain disabled under the proposed launch approval. Its ability to change merchants and amounts after the customer goes offline creates unresolved control and consent conditions that A avoids. A PISP may not change the amount, payee or other payment feature notified by the payer. A new purchase choice made before an order is formed is a distinct mandate question; it does not permit alteration of an already authorised payment order. A future C product requires a different settled instruction design, authentication treatment, fraud allocation and perimeter conclusion before release. (PSRs 2017, regulation 69(3)(h); Directive 2015/2366, Article 66(3)(h).)
Enforce A’s controls outside the language model. Validate legal merchant identity and payment destination against an approved directory; treat merchant pages and messages as untrusted input. Bind the approved basket, payee, total and currency to a unique transaction reference. Expire stale quotes, block duplicates and demand fresh approval for a changed order. Keep a customer-accessible stop mechanism and a bank-controlled means of disabling further execution. These are recommended controls for the stated risks, alongside the provider’s applicable authentication and transaction-monitoring duties. (Delegated Regulation 2018/389, Articles 2 and 5; PSRs 2017, regulation 100.)
Preserve the original instruction, mandate version, displayed approval, merchant identity, payment reference, authentication result, applied exemption, model and prompt versions, tool calls and revocation times. Record human interventions and the origin of untrusted instructions. Protect relevant logs against alteration and restrict access; do not record usable authentication secrets. Payment-system traceability requirements support this design, while data-minimisation and retention duties constrain it. Licentium’s agent workflow control review describes a service for mapping those workflows and control gaps. (Delegated Regulation 2018/389, Article 29; GDPR, Articles 5 and 32.)
The EU pilot does not establish permission or remedies across every market
PSD2 substantially harmonises payment-service rights, subject to its express options and territorial limits. Its implementation still has to be identified in the consumer’s Member State. Ireland’s regulations govern the proposed Irish bank relationship. Other countries require checks on implementation choices, contract and agency law, application of fraud and gross-negligence standards, damages, complaints, court procedure and the actual payment product. UK authorisation supplies no EU passport. (Directive 2015/2366, Articles 2, 28–29 and 107; Irish PSRs, regulations 95–101 and 124–125.)
Payment geography depends on the providers and currency, not the Singapore model server. A sterling payment from the UK bank to an Irish acquirer engages the UK one-leg provisions: the unauthorised-payment refund rule remains relevant to the UK part, while specified defective-execution provisions are excluded. Euro payments require the separate UK/EEA qualifying-scheme test. The Irish launch’s euro and EEA-provider constraints reduce these complications; an acquirer outside the EEA reopens them. (PSRs 2017, regulation 63; Directive 2015/2366, Article 2.)
The launch agreement should therefore name England and Wales and Ireland as the initial consumer markets, rather than promise EU-wide clearance. Adding Scotland, Northern Ireland or another Member State requires the relevant private-law, language, consumer information, complaints and enforcement checks. The country schedule should also identify the partner’s exact legal entity, permission, restrictions and permitted cross-border services. A bank group’s name is not evidence that every group company can supply the intended product.
Singapore law reaches the company’s actual business activities
The Singapore home-law analysis must examine what the company does from Singapore, even though the payer and merchant are abroad. Section 5 of the Payment Services Act prohibits carrying on a business of providing a payment service in Singapore without the appropriate licence or exemption. Its incidental-business rule prevents a company from dismissing a payment service merely because software is its main business. (Payment Services Act 2019, section 5(1)–(2).)
The cross-border money-transfer definition includes arranging transmission from one country or territory to another, whether as principal or agent. It can therefore reach specified foreign-to-foreign arrangements without money entering Singapore. Identify the actual payer, acquiring and settlement countries: two foreign parties do not necessarily imply a transfer between different countries. The Monetary Authority of Singapore (MAS) explains the expanded scope and separately distinguishes supporting payment-data processing. (Payment Services Act 2019, First Schedule, Part 3, paragraph 3, definition of “cross-border money transfer service”; MAS, FAQs on the Payment Services Act, 19 April 2024, questions 7.2, 13.1 and 15.1.)
The technical-provider exclusion remains important for A, where the company supports payments without possessing money. Singapore also has a commercial-agent exclusion for authorised negotiation or conclusion of sales or purchases. Both require application to the real undertaking and conduct. The stronger adverse case arises where the company independently arranges the transmission as part of the purchase service, determines its destination and causes execution. An overseas bank’s permission does not answer that Singapore licensing question. (Payment Services Act 2019, First Schedule, Part 2, paragraphs 2(a) and 2(h), and Part 3.)
Do not substitute a generic payment-agent label for the Singapore analysis. Where a Singapore licensee provides a payment service in Singapore through an agent, section 18 requires that agent to hold the appropriate licence or exemption. That provision is distinct from a genuine commercial agency for buying goods and from UK or EU payment-institution registration. (Payment Services Act 2019, section 18(1).)
Singapore’s Electronic Transactions Act recognises electronic contracting and contracts formed through automated systems. Absence of individual review alone does not invalidate such a contract. It does not establish the machine’s legal personality or prove that the customer authorised a particular order. The Act’s input-error provision concerns a natural person’s specified error where the system offered no correction opportunity, subject to its further conditions; it is no general refund right for a model’s wrong selection. (Electronic Transactions Act 2010, sections 11 and 15–16.)
Data and AI duties attach to the workflow and the responsible entities
The Singapore company determines the purposes and means of its shopping and model-operation processing, so it should assess its controller role for those activities. The banks normally determine their own payment and authentication purposes. A processor agreement is appropriate only for processing performed on another controller’s instructions; shared decisions can require joint-controller analysis. Offering the service to EU or UK consumers also engages the respective territorial targeting rules where their conditions are met. (GDPR, Articles 3, 4(7)–(8), 26 and 28; UK GDPR, Articles 3, 4(1)(7)–(8), 26 and 28.)
Document lawful bases, clear notices, purpose limits, retention and security. Shopping instructions do not automatically authorise reuse of purchase histories for model training. Minimise sensitive data and assess whether a data protection impact assessment is required before introducing processing likely to create high risk. Provide the necessary local representative where Article 27 applies. Bank authentication consent is not a substitute for the company’s data-protection analysis. (GDPR and UK GDPR, Articles 5–6, 13–14, 25, 27 and 32–35.)
Map each international transfer separately. Direct disclosure by a consumer to the Singapore company is not the same transfer arrangement as an Irish bank or EU host making personal data available to that separate company. Singapore has no EU adequacy decision, so a qualifying EU export requires an applicable Chapter V mechanism. The 2021 transfer standard clauses are not a universal answer: their scope excludes importing processing already subject to the GDPR. Identify a legally available Article 46 instrument for the actual flow, including any required supervisory authorisation, before enabling it. (GDPR, Articles 44–46; Commission Implementing Decision (EU) 2021/914, Article 1(1) and recital 7.)
For UK exports, assess the applicable adequacy or safeguard route, including the International Data Transfer Agreement or appropriate Addendum and the current data-protection test. Remote access from Singapore can constitute a transfer even if the server remains in Europe. Transfers out of Singapore must independently satisfy its comparable-protection conditions. EU hosting and Singapore certifications must each be assessed for the particular flow and applicable regime. (UK GDPR, Article 46, as amended by the Data (Use and Access) Act 2025, section 85; Personal Data Protection Act 2012 (Singapore), section 26; Personal Data Protection Regulations 2021, regulations 10–12.)
Automated-decision rules require a decision-specific analysis. In the EU, assess whether the agent makes a solely automated decision concerning the customer with legal or similarly significant effects, and whether an Article 22 exception and safeguards apply. The customer’s ability to review, reject or change the proposed purchase in A can matter; a ceremonial click does not establish meaningful involvement. UK law now uses Articles 22A–22C, with safeguards for significant solely automated decisions and specific restrictions involving special-category data and the recognised-legitimate-interests basis. Do not apply the former UK Article 22 text to the proposed launch. (GDPR, Article 22; UK GDPR, Articles 22A–22C; Data (Use and Access) Act 2025, section 80; SI 2026/82, regulation 2(j).)
An ordinary retail shopping system is not high risk under the AI Act simply because it can act autonomously. Classification depends on Article 6 and the listed intended purposes. Adding creditworthiness assessment or a listed insurance function can change the result. The Singapore company can be the provider of an AI system offered in the EU; its role is distinct from that of the provider of an underlying general-purpose model. A consumer’s personal use does not give the machine a separate regulated identity. (Regulation 2024/1689, as amended, Articles 2–3 and 6 and Annex III.)
For the new EU launch, disclose the AI interaction at the first encounter and implement applicable synthetic-output marking obligations. Article 50 applies from 2 August 2026; the marking grace period ending on 2 December 2026 is confined to systems placed on the market before 2 August. The provider must also take measures supporting staff and relevant personnel’s AI literacy, tailored to their knowledge, experience and the use setting. Those duties are separate from the high-risk category and its timetable. (Regulation 2024/1689, as amended by Regulation 2026/1744, Articles 4(1), 50, 111(4) and 113.)
Ireland supplies national enforcement and AI-complaint routes. An AI complaint does not replace the bank’s payment-refund process or make the bank’s supervisor responsible for every shopping-software issue. The responsible authority depends on the system and the national allocation of functions. (Regulation of Artificial Intelligence Act 2026 (Ireland), sections 42, 61, 71 and 129–133; SI No 403/2026, Article 2; European Union (Artificial Intelligence) (Designation) Regulations 2025, SI No 366/2025, regulations 3–5.)
Release depends on enforceable responsibilities and a working complaint path
The customer should be able to report “I did not authorise this”, “the agent ignored my instructions” or “the goods never arrived” through one incident entry point. Contract for a bank-recognised reporting channel and immediate transmission to it, with a direct bank reporting option. Timestamp receipt by the bank, freeze future app actions, preserve evidence and acknowledge which entity is responsible for each decision. An internal app ticket that never reaches the bank is insufficient protection for either party. (PSRs 2017, regulations 72 and 74–76; Irish PSRs, regulations 93 and 95–97.)
The bank should investigate authority, authentication and payment execution, decide the statutory refund and handle relevant scheme remedies. The company should investigate selection, prompt injection, credential exposure, limit enforcement and its promised compensation in parallel. The merchant should receive a cancellation, non-delivery or goods-conformity claim as appropriate. A case manager can coordinate those paths without making the customer wait for one to finish before another begins.
For payment complaints, the UK and Irish response regimes generally require a final response within 15 business days, with the prescribed exceptional extension to 35 business days. Those periods are distinct from the next-business-day unauthorised-payment refund deadline. Eligible customers must receive the relevant Financial Ombudsman Service or Irish Financial Services and Pensions Ombudsman information. The bank’s ombudsman route does not automatically cover an independent claim against the Singapore software company. (FCA Handbook, DISP 1.6.2AR and 2.8; Irish PSRs, regulations 97 and 124–125.)
The Irish bank’s online contracting must also support the applicable right to request and obtain human intervention before the consumer is bound, and in justified cases afterwards. Its interface must meet the relevant explanation and anti-manipulation requirements, subject to the statutory interaction with product-specific financial-services rules. These contract-stage duties are distinct from human review of a disputed payment. (Consumer Rights Act 2022 (Ireland), sections 125C and 125H–125I, inserted by SI No 309/2026, regulation 7.)
Before release, require a signed allocation of the bank’s account, credential, authentication, execution, refund and complaint duties. Specify the company’s software controls, permitted access, evidence-delivery deadline, incident support and breach-based indemnities. Any indemnity must operate between the businesses without reducing the customer’s statutory entitlement. The bank must be able to stop the relevant payment integration and obtain the records necessary to meet its own obligations. (PSRs 2017, regulations 75–76; Irish PSRs, regulations 96–97; Regulation 2022/2554, Articles 28–30.)
The permission review should establish whether a command from Singapore software can cause a debit without a fresh customer act in the bank flow. Identify who contracts to issue the instrument and whether the company can use, replay or amend its credential. Determine whether the company supplies the bank’s payment service or its own, and whether its Singapore activity arranges a transfer across countries. Obtain the partner’s legal entity and permission record, and seek the relevant regulator’s determination where the proposed activity requires one. A commercial integration approval cannot replace an authorisation or exemption required by law. (PSRs 2017, regulation 138 and Schedule 1; Directive 2015/2366, Articles 3–4 and Annex I; Payment Services Act 2019, section 5 and First Schedule.)
Hold release if the bank cannot accept the complaint and refund allocation, if the company can execute outside the approved order, or if the required transfer mechanism is unavailable. Reopen permission and product approval before adding custody, refund balances, account-information access, independent initiation, an issuing undertaking, standing autonomous execution or new payment countries. Where the changed activity is regulated, obtain the appropriate permission or restructure the service before activation. Variant A is defensible only while the customer, bank and company retain the precise powers described here.