Scheme Changes, Regulatory Change and Product Impact

Scheme changes are updates to the rules, fees and technical standards published by the payment schemes, and they arrive on a fixed calendar. Visa and Mastercard publish major rule changes in April and October each year, with a notice period of six months for the most significant changes. A change may require a new field in a payment message, a new fraud check, or a change to the chargeback process. The product manager receives the scheme bulletin, reads the changes that affect their product, and logs each one with its effective date and its impact. A change that affects a card product used by 500,000 customers needs a different response from a change that affects a niche corporate product used by 200 customers. Regulatory change comes from governments, central banks and regulators, and it can reshape a whole product. The Revised Payment Services Directive, known as PSD2, required banks in Europe to open their payment systems to third party providers through APIs, which created a new market for payment initiation services. The United Kingdom Payment Systems Regulator has set rules on authorised push payment fraud reimbursement, which require banks to refund victims in many cases and have changed how banks price and control instant payments. The product manager must track consultations, draft rules and final rules, and plan for the final rule well before it takes effect, because a bank cannot rebuild a product in a few weeks. Impact assessment is the structured analysis that turns a scheme or regulatory change into a clear plan. The manager asks four questions, which customers are affected, which systems must change, what will it cost, and what is the deadline. A new ISO 20022 message requirement may affect 12,000 corporate customers who send pain.001 files, require changes to the payment hub and the customer portal, cost 800,000 pounds to build and test, and have a deadline of eighteen months. The manager documents the answers in an impact assessment, shares it with technology, operations and risk, and agrees the approach. Without this assessment, a change can be underestimated and delivered late, which risks a fine or a loss of the licence to operate the product. Turning a mandatory change into an opportunity is a mark of a good product manager. When the Faster Payments system in the United Kingdom raised its transaction limit from 250,000 pounds to one million pounds, a bank could simply update the limit and tell no one, or it could launch a campaign to tell corporate customers that they can now pay a supplier one million pounds instantly. When new fraud rules required a confirmation of payee check, a bank could treat it as a compliance cost, or it could use it as a selling point that its payments are safer than a competitor. The manager looks for the customer benefit inside every mandatory change, and uses it to improve the product story and to justify the investment to senior management. A real example shows the scale of regulatory change. When the Bank of England announced that CHAPS would migrate to ISO 20022, every bank in the United Kingdom had to rebuild its high value payment messages, its customer screens and its reconciliation processes. The migration took several years and cost large banks tens of millions of pounds. Product managers had to manage the change for their corporate customers, who needed to update their own systems to send the new message format, and had to run dual processing during the transition so old and new formats both worked. The banks that planned early, communicated clearly and tested thoroughly migrated smoothly, while the banks that left it late faced delays and customer complaints.