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New rules on Payment Services for the benefit of consumers and retailers
In order to adapt EU payments market to the opportunities of the single market and to support the growth of the EU economy, the European Commission adopted today a package including:
A new payment Services Directive ("PSD2")
A proposal for regulation on interchange fees for card-based payment transactions
Internal Market and Services Commissioner Michel Barnier said: "Today, the payment market in the EU is fragmented and expensive with a cost of more than 1% of EU GDP or ?130 billion a year. These are costs our economy cannot afford. Our proposal will promote the digital single market by making internet payments cheaper and safer, both for retailers and consumers. And the proposed changes to interchange fees will remove an important barrier between national payment markets and finally put an end to the unjustified high level of these fees."
Vice President Joaquín Almunia added: "The interchange fees paid by retailers end up on consumers' bills. Not only are consumers generally unaware of this, they are even encouraged through reward systems to use the cards that provide their banks with the highest revenues. Complementing the enforcement of antitrust rules, the regulation capping interchange fees will prevent excessive levels of these fees across the board. A level playing field will be created for payment services providers, new players will be able to enter the market and offer innovative services, retailers will make big savings by paying lower fees to their banks, and consumers will benefit through lower retail prices."
The revised Payment Services Directive brings a number of new important elements and improvements to the EU payment market:
It facilitates and renders more secure the use of low cost internet payment services by including within its scope new so-called payment initiation services. These are services that operate between the merchant and the purchaser’s bank, allowing for cheap and efficient electronic payments without the use of a credit card. These service providers will now be subject to the same high standards of regulation and supervision as all other payment institutions. At the same time, banks and all other payment service providers will need to step up the security of online transactions by including strong customer authentication for payments.
Consumers will be better protected against fraud, possible abuses and payment incidents (e.g. in case of disputed and incorrectly executed payment transactions). Consumers may be required to face only very limited losses – up to a maximum of 50 EUR (vs 150 EUR currently)- in cases of unauthorised card payments.
The proposal increases consumer rights when sending transfers and money remittances outside Europe or paying in non-EU currencies.
It will promote the emergence of new players and the development of innovative mobile and internet payments in Europe for sake of EU competitiveness worldwide.
Full text of the press release
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