25 March 2014

EPC: Considerable scope for amendment on PSD2

Following a detailed analysis of the Commission's PSD2 proposal, the EPC has identified considerable scope for amendment of the proposed new set of rules related to the activity of so-called third party payment service providers offering payment initiation or payment account information services.

In a previous blog, entitled ‘On the Difference between Innovation and the Wild West: How to Ensure the Security of Bank Customers’ Funds and Data with Payment Account Access Services’, the EPC observed: Convenience is a priority. Security is indispensable. Promoting payment innovation to the benefit of both payers and payees requires combining the two. Anyone with an interest in incentivising payers and payees to embrace new payment solutions, (regardless of whether these are offered by ‘banks’ or ‘non-banks’), should adhere to the principle of ‘safety first’. Consequently, the EPC has emphasised the need for the future revised Payment Services Directive (PSD2) (and other legislative and regulatory initiatives) to address key requirements related to payment account access services such as supervision and licensing, security, consumer and data protection, transparency, liability allocation and the need for explicit consent.

Following a detailed analysis of the Commission's proposal for PSD2, the EPC has identified considerable scope for amendment of the proposed new set of rules related to the activity of so-called third party payment service providers offering payment initiation or payment account information services.

This blog updates on the state of play of the EU legislative process leading to the adoption of PSD2. It also provides an overview of the EPC’s key considerations with regard to aspects related to third party payment service providers set out in the Commission’s proposal for PSD2.

In the view of the EPC, substantial amendments to the Commission’s proposal will have to be agreed in the further dialogue between the EU co-legislators, i.e. the European Parliament and the Council of the EU representing EU Member States, to ensure the security of bank customers’ funds and data with payment account access services under the forthcoming PSD2. Moreover, an interim solution would be required to address the current lack of legal framework regarding the licensing of third party payment service providers until the revised PSD is fully implemented in EU Member States’ legislation and effective.

Full blog

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