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In your view, which of the following initiatives will have the greatest impact on the European payments market?

European Commission proposal for revised Payment Services Directive (PSD2)
European Commission proposal for new Regulation on interchange fees for card-based payment transactions
Work programme of Euro Retail Payments Board, chaired by European Central Bank
SecuRe Pay Forum recommendations for security of internet payments; for payment account access services; for security of mobile payments
Guidelines and technical standards issued by European Banking Authority pursuant to mandate provided by proposed PSD2 (Articles 86, 87)
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EPC Newsletter
Issue 7 - July 2010

Legal and Regulatory Issues

PSD: taking ActionCommission determined to ensure transposition and PSD Expert Group offers further guidance

19.07.10 BY Ruth Wandhöfer

INTRODUCTION AND SUMMARY

While the majority of EU Member States has fully implemented the Payment Services Directive (PSD), six Member States - Cyprus, Greece, Spain, Poland, Romania and Sweden - still have to implement some or all of its provisions. In June 2010, these countries received reasoned opinions from the European Commission requesting them to fully implement the PSD in their national laws. Ruth Wandhöfer gives an update on the PSD implementation status and introduces the addendum to the PSD Guidance Document first released by the banking industry's PSD Expert Group in August 2009. The addendum primarily seeks to clarify several key PSD concepts currently subject to inconsistent market practices. A link to this document is included at the end of this article.

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Commission acts to ensure that EU Member States fully implement PSD

In June 2010, the European Commission has taken action against six EU Member States to ensure full transposition of the PSD into their respective national law. Cyprus, Greece, Spain, Poland, Romania and Sweden received reasoned opinions requesting them to fully implement the PSD in their national laws (a link to the related press release of the Commission is included below). If a Member State does not reply satisfactorily to its reasoned opinion within two months, the Commission may refer the matter to the Court of Justice. In Greece, Sweden and Poland the entire PSD still has to be implemented. In three Member States, additional or secondary legislation is still required in order to implement a number of provisions, mainly related to prudential requirements for payment institutions (Romania), information requirements (Spain) or anti-money laundering requirements (Cyprus).

Sweden now anticipates completing the transposition process by 1 August 2010. Greece, Poland and Iceland - the latter being the remaining Member of the European Economic Area (EEA) where transposition remains outstanding - are expected to follow suit by the latest in the fourth quarter of 2010. Once all EEA countries have finally fully implemented the Directive, it will be task of the Commission Services' to identify any instances of non-conforming interpretation and / or transposition by individual Member States to ensure that the expected legal harmonisation based on the PSD will actually materialise. 

PSD Expert Group publishes addendum to the PSD Guidance Document

As previously reported, various inconsistencies have been observed in the live PSD environment including but not limited to diverging practices with regard to charging options; unexpected deductions and / or lifting fees applied to credit transfers and differing charging models exhibited by intermediary institutions. For details on these inconsistencies refer to the article "PSD in Practice: a Follow-Up" (a link is included below).

To help remediating emerging issues under the PSD regime as described above, the banking industry's PSD Expert Group recently published a supplement (the addendum) to its original PSD Guidance Document first issued in August 2009 (see links below).

The addendum to the Guidance Document has the following objectives:

  • Reinforce core PSD concepts and scope where there is evidence pointing to a lack of common understanding.
  • Reiterate and, where necessary, elaborate on existing market best practice with regard to various PSD-related topics.
  • Collate an overview of derogation usage and examples of variations in transposition at the level of individual Member States as a starting point for alignment in the mid-term.

The addendum, therefore, offers valuable and practical support to payment service providers. In addition, the PSD Expert Group expects that the document will serve as basis for further dialogue aimed at efficient and consistent PSD implementation across the EEA.

Ruth Wandhöfer chairs the PSD Expert Group and is a member of the EPC Plenary. She also chairs the EPC Information Security Support Group (ISSG).

Related links:

PSD Expert Group Guidance Document 

Addendum to the PSD Expert Group Guidance Document of June 2010 

PSD website of the European Commission

European Commission Press Release: "Internal Market: Commission acts to ensure that 8 Member States implement EU rules on payment services and public procurement redress" of 3 June 2010

Related article in previous issue:

PSD in Practice: a Follow-Up. Further clarification of key PSD concepts required to ensure full legal harmonisation (EPC Newsletter, Issue 6, April 2010)

 

 

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