Brussels, 08/02/2007 (Agence Europe) - The German Presidency has put on a spurt in the Council to reach a rapid agreement on the draft directive on payment services (see EUROPE 9080). With three weekly expert group meetings and a meeting of the inter-institutional trilogue this Friday, it is hoping for an agreement at the March Ecofin Council. But differences remain considerable: there is a stand off between two sides on what is required in terms of capital for payment companies. Time is short because the EP, which, in September 2006, adopted an opinion in the parliamentary economic and monetary affairs committee (see EUROPE 9265), has agreed to delay the plenary vote on the “Gauzès” report until the spring. The industry, too, urgently needs clear legal rules to be able to meet its commitment to propose, as of January 2008, the first services linked to the completion in 2010 of the Single Euro Payment Area (SEPA). Speaking to EUROPE on Thursday 8 February, Jean-Paul Gauzès (EPP-ED, France) expressed growing pessimism on the progress being made in Council. On the “major points” - such as requirements in terms of capital, agreeing a loan and prudential supervision - “there is no agreement”, he complained. He said that if there as such an agreement, it would be far -from the position of the inter-parliamentary commission and would greatly complicate the first reading adoption of the text. “It will be time to vote,” he added, “in March or April”.
There are “wide differences” within the Council, which “still needs time”, said a European source. If the EP votes in March, the source added, “The Council could be stuck”. A diplomatic source revealed that “the level of initial capital to be able to offer payment service” was still the great bone of contention. This source said that the delegations agreed on the need to set minimum “financial surfaces” for payment companies, which would have to be differentiated depending on the level of complexity of the payment service. Opinions vary, however, on the threshold levels put forward by the German Presidency in its third compromise proposal. One group of member states (Denmark, Finland, Ireland, the Netherlands, Poland, the Czech Republic and the United Kingdom), backed by the Commission, is arguing for a softer regime, while another group, including Germany, Belgium, Spain, France, Greece and Italy, feels that stricter requirements are needed. For one side, this is a way of protecting consumers, and, for the others, a way of restricting competition for the players already on the market. The EP committee introduced capital requirements for new payment companies of somewhere in the range of €100,000 to €500,000.
Discussions also focus on the exemption of small payment companies from some of the directive's rules. “Some member states fear that others will be able to exempt too big players,” said a diplomatic source. Another point for negotiation is the facility for payment companies to propose credit services directly related to payment operations. If such an activity - riskier than a payment - were to be authorised, “how would it be possible to ensure that players did not use (payment services) customers' money to manage there lending?” wondered another expert close to the matter. The Gauzès report backs the agreement of limited duration loans (24 months) only if they are related to payment operations, and it comes out in favour of a blocking system for the money used for payment operations. With regard to the timescale in the implementation of transactions, most member states seem to be in favour of the “D+1” rule, that is, the day following the date on which the payment order is launched. The Commission favours this approach, but the Gauzès report comes down on the “D+2” rule in 2010. (mb)