PSD I and PSD II Presentation Global Money Transfer Summit 2013 - - PowerPoint PPT Presentation

PSD I and PSD II

Presentation Global Money Transfer Summit 2013

29-30 October 2013

Structure of the presentation

• PSD I: Impact
• PSD II: Overview of main proposed changes
• Assessment of proposed changes relative to

recommendations in iff-LE-PaySys study

• Timetable

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PSD I: Impact PSD I provided a comprehensive legal framework for the provision of payment services in the European Economic Area  PSD I created a new type of payment service providers

• payment institutions

 PSD I aimed to create Single Market in payment services through harmonisation of rules, passporting -> greater competition, greater choice and lower prices

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PSD I: Impact  Overall assessment:

• Positive impact in terms of shorter execution times and

greater transparency

• Contributes to achieving Single Market in payment

services and provides required legal framework to achieve this objective

• However, at the present time, this is still very much work

in progress

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PSD I: Impact Overall assessment (continued)

• No substantial impact of the PSD so far with regards to:
• market entry of new providers
• technical innovations
• cross-border/Single Market provision
• efficiency

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PSD I: Impact – payments industry under PSD I As of late August/early September 2012

• 568 authorised payment institutions (APIs)
• 2,203 institutions were registered as small payment

services providers (SPSPs) under Article 26 (waiver) of the PSD

“Money remittance” is most frequent authorised service (40% of all authorisations)

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PSD I: Impact – payments industry under PSD I

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4 9 9 10 13 37 6 8 11 46 5 12 2 10 45 20 4 14 28 2 9 7 23 4 6 224

50 100 150 200 250 AT BE BG CY CZ DE DK EE EL ES FI FR HU IE IT LT LU LV MT NL NO PL PT RO SE SI SK UK

Number of APIs - September 2012

PSD I: Impact – payments industry under PSD I As of August 2012, only 32% of APIs had sought a passport to provide payment services into another EEA Member State

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PSD I: Impact – payments industry under PSD I

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PSD I: Impact – payments industry under PSD I  The total value of transactions in the EEA undertaken in 2010 by APIs through money remittance, transfers and retail foreign exchange activities, plus foreign exchange brokers and card acquirers amounted to EUR 594.5 billion or 4.7% of EEA GDP

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PSD I: Impact – payments industry under PSD I

11 €30.7, 5.2% €458.6, 77.1% €78.8, 13.3% Money remittance, transfers and retail foreign exchange activities Foreign exchange broking Card acquiring Three-party card schemes Internet payment service provision + general service provision - turnover

PSD II: Overview of main proposed changes

 Scope (positive)

• One-leg transactions: transparency & information requirements

apply to leg in EU

• Currency: transparency & information requirements apply to all

currencies (and not only EU currencies)

• Annex list of activities: inclusion of TPPs – to be licensed /registered

as payment institution (even if do not dispose of payer’s/payee’s funds at any time)

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PSD II: Overview of main proposed changes

 Article 9 – safeguarding requirements

• Further streamlining and harmonisation – reducing possibilities for MS to

limit safeguarding requirements / methods

 Article 14 (new) – unique electronic access point within EBA

• Interconnection / access of public registers listing authorised/registered PIs

 Article 27 – small payments institutions

• Memorandum: “Expansion of lighter regulatory regime to cover a higher

number of small payment institutions...”

• But, revised article lowers threshold from €3 to €1 million per month

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PSD II: Overview of main proposed changes

Scope (negative)

• Tightening of limited network definition (consistent with Directive

2009/EC)

• Telecom exemption clarified that applies exclusively to ancillary

payment services (including purchases of digital content as ancillary services to electronic telecommunications services) – limits: transaction <€50 and maximum €200 billing per month

• Deletion of exemption for independent ATM networks

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PSD II: Overview of main proposed changes

 Article 29 – access to payment systems

• Indirect access conditions to designated payment systems made identical to

those for smaller credit institutions – if access is provided indirectly, non discrimination

Articles 65 and 66 – liability of payment service provider and payer for unauthorised transactions

• Harmonisation and streamlining
• Maximum amount of payment threshold for compensation for unauthorised

payment transaction is reduced from €150 to €50

• Late payments does not necessarily trigger refund

 Article 65 – refunds for unauthorised debits – unconditional

refund right subject to non-consumption

• Made consistent with SEPA Core Direct Debit Rule

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PSD II: Overview of main proposed changes

 Articles 85, 86, 87 (new) – application of security and authentication of forthcoming Directive on Network and Information Security to payment service providers Title IV Chapter 6 – Out-of-court complaints and redress procedures for settlement of disputes

• Article 90: norm is 15 business days for payment service providers to

respond to customer complaint

• Article 88: public authorities to designate/set up competent

authority to handle complaints from payment services users and

• ther interested parties (such as consumer associations)

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PSD II: Overview of main proposed changes

 Articles 55(3) and (4) – surcharging

• Prohibition for cards subject to new Regulation capping MIF of four

party schemes and third party issuance of three-party schemes

• Authorisation for cards not subject to new MIF-capping regulation

but surcharge has to correspond to real costs incurred (in line with Directive 2011/83)

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Overview of changes

 Access to bank account

• Recital 27: “For payment institution to be able to provide

payment services, it is indispensable that they have access to payment accounts. Member States should ensure that such access is provided in a way proportionate to the legitimate aim it intends to serve”

• Article 17.2: “When payment institutions engage in the

provision of one or more of the payment services, they may hold only payment accounts used exclusively for payment

• transactions. Member States shall ensure that access to those

payment accounts is proportionate”

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Timetable

• EC aims for trilogue (European Parliament, European Council

and European Commission) to be completed by Spring 2014

• Very ambitious timetable in light of sensitivity of some of the

issues, gestation period of PSD and crowded legislative agenda

• Moreover, not on the draft list of “Priority items for adoption

by the legislator” accompanying the recently published draft work program of the EC

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