“EU’s approach to digital payments has contributed to making them safer, faster and less expensive for users, while there is limited data to assess the contribution precisely”, emphasised the European Court of Auditors in a report it published on Thursday 9 January. However, it did have identify two drawbacks: price interventions and account data sharing.
On the one hand, the criteria for assessing the adequacy of price interventions are unclear and there are no periodic reviews. “For some of the existing interventions linked to card payments, the European Commission could not demonstrate that the positive effects for consumers clearly outweigh the negative ones”, said Ildikó Gáll-Pelcz, the member of the Court of Auditors responsible for the report, in a press release.
The auditors also noted that inappropriately designed price interventions may lead to inefficiencies in the way in which payment service providers operate, as well as distorting supply and demand or, worse still, harming consumers and merchants. They recommend defining criteria for price interventions in the area of digital payments and carrying out periodic reviews.
On the other hand, there are gaps in the legal framework regarding account data sharing under open banking, in particular the lack of standardisation and weak monitoring mechanisms. There are also still obstacles to data sharing due to the lack of financial incentives for holders of payment information and non-standardised interfaces. The Court of Auditors found that the lack of data restricts the European Commission’s ability to analyse open banking policy in depth.
It recommends that it develop and implement a data monitoring strategy by the end of 2027. This would enable it to “determine what types of data are needed for informed policy decisions, the sources of such data, the frequency of data collection, and the requirements to collect data effectively and efficiently”.
In its response to the report, the European Commission acknowledges the importance of the issues raised, as regards the principle of evidence-backed decision-making, the need to adequately assess the impact of policies, and the importance of appropriate supervisory guidance in ensuring a level-playing field.
It notes that work on many of the issues identified in this report has already begun, particularly in the context of the ongoing revision of the current regulatory framework for payment services. In June 2023, the Commission presented proposals for a Payment Services Regulation (PSR) and a third Payment Services Directive (PSD3). These issues are currently being discussed by European co-legislators (see EUROPE 13550/10).
Read the report here: https://aeur.eu/f/ezg
Read the European Commission's response: https://aeur.eu/f/ezi (Original version in French by Anne Damiani)