Britain's payments sector on Monday called on its regulator to roll back and delay by a year tough new compensation rules due to start in October, saying that "significant changes" were needed to avoid damaging competition.

The Payment Systems Regulator (PSR) said in December that banks and other payment firms must reimburse defrauded customers to a maximum of 415,000 pounds ($528,000) from October.

The PSR said in response to the payment sector call that it needed to "act quickly" to combat authorised push payment fraud, whereby people are tricked into sending money from their account to a fraudster posing as a genuine payee, after victims lost around 450 million pounds ($572 million) last year.

The Payments Association, an industry body, said in a briefing paper to PSR interim head David Geale, who on Monday replaced Chris Hemsley, that the new rules should be delayed a year to allow the sector to get ready.

Big tech firms should also help tackle payment fraud, the industry body said, adding there should be a cap of 30,000 pounds on reimbursement, still above the average size of scam affecting businesses and individuals.

"We believe that to mitigate systemic risk and prevent damage to the payments industry from some of the PSR’s current plans, significant changes are needed," Tony Craddock, director general of The Payments Association, said in a statement.

Without changes, the new rules would significantly increase burdens on companies to reduce competition, the association said.

Geale said that after more than two years of extensive consultation and industry engagement, the PSR requirements will come into effect on Oct. 7.

"We will continue to engage with and support industry, taking into account all feedback as we move forward and as industry works hard to implement the systems and processes needed for the new reimbursement requirements," Geale said in a statement.

The PSR has said the cost of reimbursement must be split between the sending and receiving banks.

(Reporting by Huw Jones; Editing by Hugh Lawson)