Once agreed by the co-legislators (the Council and the European Parliament), the proposals will create a new payment services regulation and will amend the existing payment services directive (PSD2) to create a more modern framework in this field.
Today, member states’ representatives (Coreper) approved the Council’s stance on improving the payment services environment in the EU. „The upgrade aims to reduce payment fraud, promote technological innovation, better protect consumers and increase transparency on fees.” – according to the press release.
„Consumers deserve a fraud-resistant, transparent and safe payment services environment. At the same time, we need to encourage innovation in the sector. These new rules will deliver on both fronts.” – said Andrzej Domanski, Polish minister for finance.
Tackling payment fraud, increasing consumer protection and transparency
The proposals aim to put in place a comprehensive anti-fraud framework. This could help tackle increasingly common new forms of payment scams, such as so-called ‘spoofing fraud’, which happens when a fraudster pretends to be a customer’s payment service provider to gain trust and trick the user into carrying out financial actions.
Among other provisions, payment service providers will have to share fraud-related information between themselves, and put in place a system where IBAN numbers can be checked against a corresponding bank account name before transferring money to it.
The Council’s negotiating mandate strengthens the anti-fraud aspects of the proposals by including electronic communications service providers such as internet carriers and messaging platforms in the fraud prevention scope. It stipulates more clearly that consumers should not be left at a disadvantage as a result of fraudulent behaviour, and emphasises that the new legislation must align closely with EU data protection law.
The new rules also introduce more transparency when it comes to ATM transactions which will have to show all fees due and exchange rates before a transaction takes place. The Council has introduced further provisions to enhance transparency on payment card scheme fees and rules. Overall, EU consumers and businesses will have a better overview of applicable fees and will therefore be able to make better choices.
New developments in technology
The proposals also aim at adapting the EU’s payment service landscape to new and innovative ways of making payments. Innovative payment initiation service providers and information services providers will be able to offer customers more useful and more modern payment services because of their improved access to all necessary bank account information. The Council’s position, while supportive of innovation in the payment service industry, also argues for safeguards to be put in place in this area.
Next steps
The agreement on the Council’s negotiating mandate allows the presidency to start negotiations with the European Parliament on a final text
Background
The Commission made its proposals to modernise EU payment services on 27 June 2023. The initiative forms part of the Digital Finance Strategy. The Strategy aims to help unleash European innovation and create opportunities to develop better financial products for consumers, including for people currently unable to access financial services. It should also unlock new ways of channelling funding to EU businesses, in particular SMEs.
_____________
Related documents
Council mandate for negotiations on the payment services regulation
Council mandate for negotiations on the payment services directive
Banking 4.0 – „how was the experience for you”
„To be honest I think that Sinaia, your conference, is much better then Davos.”
Many more interesting quotes in the video below:
