“This new directive will create a clear regulatory framework for several types of new market players who have been active in the area of internet payments already for a few years, namely payment initiation service providers and account information service providers," said Jānis Reirs, Minister for Finance of Latvia and president of the Council. "The directive will allow also new types of services like issuance of payment instruments by third party payment service providers. This will create a new incentive to increase competition and foster innovations in the payments market. I believe that the additional provisions on security and supervision will increase also the safety of online payments and consumer protection in the EU.”
The agreement still has to be confirmed by the Council once the full text of the directive is finalised at technical level. The directive will then be submitted to the European Parliament for a vote in first reading, and to the Council for final adoption.
The draft directive incorporates and repeals an existing payment services directive (directive 2007/64/EC), which provided the legal basis for the creation of an EU-wide single market for payments.
The revised directive would adapt existing rules to emerging and innovative payment services, including internet and mobile payments. It would establish a comprehensive set of rules with the aim of ensuring a more secure environment for payments, in particular for those using remote channels. The directive would also set up a more harmonised and effective framework for supervision by national competent authorities.
Since adoption of the original payment services directive in 2007, innovative methods for the initiation of payments in the field of e-commerce have evolved. They usually form a software bridge between the website of the merchant and the online banking platform of the payer’s bank in order to initiate internet payments on the basis of a credit transfer. These services, which are now covered by the draft directive, enable the payment initiation service provider (who never holds the user’s funds) to give assurance to the payee that the funds necessary for a specific payment transaction are available on the account and the payment has been initiated.
A regulatory regime to cover the activities of account information services is also provided for. These services offer the payment service user, for example, with aggregated online information on one or more payment accounts held with one or more other payment service providers. This enables the payment service user to have an overall view of his/her financial situation at any given moment.
At the same time the draft directive promotes the strengthening of security measures for internet payments and for the use of services provided by the abovementioned new market players. The new directive will ensure strong customer authentication to identify the client for each transaction. The new and strengthened supervisory regime will further increase the security level and consumer protection in this field.
Once the directive has been adopted, member states will have two years to transpose it into their national laws and regulations.