Brussels, 06/05/2015 (Agence Europe) - Representatives of the European Parliament and Latvian Presidency of the Council of the EU struck agreement in principle on Tuesday 5 May on the revision of the payment services directive.
The aim of the review is to boost the security of payments in the digital age, encourage competition on the payments market and boost consumer protection (see EUROPE 11213).
“The EU payment services market remains fragmented and expensive, costing €130 billion, or over 1% of EU GDP, a year. (…) The new regulatory framework will reduce costs, improve the facility of payments and facilitate the emergence of new players and innovative and mobile new internet payment methods,” said Antonio Tajani (EPP, Italy), the European Parliament's rapporteur on this matter. Latvian finance minister Janis Reirs commented: “The directive will allow new types of services like issuance of payment instruments by third-party payment providers. This will create a new incentive to increase competition and foster innovation in the payments market.”
The new rules, which will come into force two years after they are adopted, will mean that a consumer using an online bank account will be able to use payment software managed by a third party to carry out payments. In order to remove obstacles to new players, banks will only be allowed to refuse access to a customer's bank account by a third party solely for objectively justified security reasons notified to the bank supervisory body, explains a European Parliament press release.
The draft directive introduces European rules to ensure the security of innovative payment services by mobile devices and the internet. It covers the providers of payment initiation services which tell the beneficiary in advance whether a potential customer has enough money in their bank account to make the payment. The draft legislation covers the work of information service providers which give users an overview of their financial situation and transactions carried out from accounts with a range of payment service providers.
In order to boost consumer protection, they will be exempt from the first €50 to €150 that they currently have to pay if money is taken out of their account fraudulently, except in the event of proven fraud or gross negligence.
Banks express their dismay. The European Banking Federation (EBF) says that the impact of the new rules is difficult to predict because “it is more than likely that this agreement provides yesterday's solutions to tomorrow's problems.” It adds: “A fragile balance has been sought between sometimes conflicting objectives, such as innovation, user security, market integration, data protection and competition. The final agreement broadly reflects political ambitions to see a bigger role played by non-bank services providers. The EBF believes that this agrement will be to the detriment of European consumers and the necessary protection of their bank accounts. (…) The new directive makes banks poetntially liable for possible irregularities or external attacks when consumers use third-party services.”
The agreement on which agreement in principle has been struck now needs to go to inter-institutional talks at the technical level. It will then be enshrined in first reading at the European Parliament, possibly in June or July. (Mathieu Bion)