The proposed directive incorporates and repeals Directive 2007/64/EC, the so-called Payment Services Directive ("PSD") which sets the basis for a harmonised legal framework for the creation of an integrated payments markets.
In this article we outline the main aspects of the PSD2. Please note that this is not an extensive review of the PSD2.
The payment services directive 2 is relevant for payment services providers, such as banks, electronic money institutions and authorised payment institutions.
This directive is also relevant for those who make use of a payment services provider. This may be the case for online retailers and for merchants who sell services and goods through online sales platforms.
Compared to the PSD, the scope of the PSD2 is extended, both as regards the geographical scope as well as the currencies being covered.
The PSD2 will apply where both the payer's payment services provider and the payee's payment services provider are located within the European Union or where the sole payment services provider is located within the European Union. The PSD2 will also apply where only one of the payment services provider is located in the European Union. So-called 'one-leg' transactions will thus be brought within the scope of the PSD2.
The PSD2 contains provisions with regard to the transparency of conditions and information requirements for payment services, which will be applicable to payment services in any currency. With regard to payment services made in euro or in the currency of a Member State outside the euro zone, additional specific provisions apply.
Like the PSD, the PSD2 contains a negative scope provision, which outlines the conditions under which the directive will not apply. These exemptions have been redrafted in the PSD2.
Currently, under the PSD, the 'commercial agent' exemption is been used with regard to payment transactions handled by e-commerce platforms on behalf of both the payer and the payee. This use goes beyond the purpose of the exemption and should, according to the European Commission, be further circumscribed. Under the PSD2, the 'commercial agent' exemption has been amended to only apply to commercial agents which act on behalf of either the payer or the payee, and not to those which act for both payer and the payee.
The PSD contains a 'limited network' exemption. This exemption has increasingly been applied to large networks involving high payment volumes and ranges of products and services. This current market practice goes beyond the original purpose of this exemption, as it leaves large volumes of payments outside the regulatory framework and, as such, creates a competitive disadvantage for regulated market actors. Under the PSD2, the 'limited network' exemption is therefore amended to contribute to reducing the aforementioned risks.
The PSD contains a 'telecom' exemption.This allowed telecom operators to sell ring tones, wallpapers, games and similar content for cell phones, without becoming subject to the requirements of the PSD. Under the PSD2, this exemption is redefined with a more restricted focus. The exemption will apply for the provision of digital content furnished by a third party, subject to certain thresholds. The value of any single payment transaction may not exceed 50 euro and the cumulative value of payment transactions may not exceed 200 euro in any billing month.
Under the PSD2, it will be possible for Member States to introduce a 'light regime', which will only be applicable under certain conditions. It is not clear whether such regime will be introduced in the Netherlands.
- Access to payment systems
Payment systems will have to have in place objective, non-discriminatory and proportionate rules with regard to access of authorised or registered payment services providers. These rules may not inhibit access more than is necessary to safeguard against specific risks such as settlement risk, operational risk and business risk and to protect the financial and operational stability of the payment systems.
Under the current PSD, merchants are allowed to request from the payer a charge, offer him a reduction or otherwise steer him towards the use of the most efficient payments means. However, Member States may (under the current PSD) forbid or limit any such surcharging for its territory.
Currently, some, but not all, Member States have used the option to prohibit such surcharging.
The PSD2 will harmonise surcharging practices. A payment services provider shall not prevent the payee from requesting from the payer a charge, offering him a reduction or otherwise steering him towards the use of a given payment instrument. Any charges applied may, however, not exceed the costs borne by the payee for the use of the specific payment instrument.
- Unauthorised payment transactions
In the case of an unauthorised payment transaction, the payer's payment services provider refunds the payer immediately the amount of the unauthorised payment transaction and, where applicable, restores the debited payment account to the state in which it would have been had the unauthorised payment transaction not taken place.
The payer, however, may be obliged to bear the losses relating to any unauthorised payment transactions, up to a maximum of 50 euro, resulting from the use of a lost or stolen payment instrument or from the misappropriation of a payment instrument.
Except in case of fraud and gross negligence, the maximum amount a payment user could under any circumstances be obliged to pay in case of an unauthorised payment transaction will be decreased from the current amount of 150 euro to 50 euro.
- Refunds for payment transactions
Under certain conditions, a payer is entitled to a refund from the payment services provider of an authorised payment transaction initiated by or through a payee, provided that the good or service paid for has not yet been consumed. This provision is in line with the SEPA Core Direct Debit Rulebook.
Out-of-court complaint procedures
Member States will have to ensure that procedures are set up which allow payment services users and other interested parties, such as consumer associations, to submit complaints to the competent authorities with regard to payment services providers' alleged infringements of the PSD2.
Internal dispute resolution
Furthermore, payment services providers will have to put in place adequate and effective consumer complaint resolution procedures for the settlement of complaints of payment services users concerning the rights and obligations arising under the PSD2.
Payment services providers will have to make every possible effort to reply, in writing, to the payment services users' complaints, addressing all points raised, within an adequate timeframe and at the latest within 15 business days. In exceptional cases, this deadline can be extended.
Under the PSD2, payment services providers and third party payment providers can be held liable for breaches of the national provisions adopted pursuant to the directive. Competent authorities will have the right to take appropriate administrative measures and impose administrative sanctions where breaches of duties imposed by the PSD2 by payment services providers and third party payments providers occur.
For more information please contact Adam Pasaribu, Pauline Vos or Roelien van neck.