Update for Payment Services Directive opens way for safer and more innovative European payments
The final hurdle to an upgraded EU payment services law was cleared on Thursday, when MEPs voted in the revised Directive on Payment Services (PSD2). This aims to make payment transactions safer and terminate card surcharges.
The new rules aim to improve protection of consumers when they make payments, promote development and use of innovative online and mobile payments, and make European payment services safer.
The EU payment services market is fragmented and expensive, and costs EUR 130 billion, or over 1% of EU GDP, a year. As EP rapporteur Antonio Tajani MEP said when presenting his report, "the EU economy cannot afford these costs if it wants to be globally competitive”.
The new framework for payments reflects changes in the way people make payments – where payments are increasingly made through providers other than one's own bank.
Concrete benefits for consumers include:
- the banning of surcharges for the use of debit and credit cards (for example when booking a flight or hotel);
- a reduction on the consumer’s personal liability in case of fraudulent payments (for example with a stolen card), from EUR 150 to a maximum of EUR 50.
- a direct refund from a consumer's bank in the case of an unauthorised transaction when using third party providers;
- a requirement for security breaches or data losses to be communicated immediately to users of payment services.
These changes are important for the development of a digital single market in Europe, and will contribute to a more secure and trustworthy online market. They should also help new players compete for digital payment services alongside banks and other traditional providers, to provide innovative payment solutions for consumers.
"European consumers want to know that their payments are safe when they shop or make a payment online", says finance Commissioner Jonathan Hill.
Most welcome for the consumer is likely to be surcharges for card payments finally becoming history. These, as Monique Goyens, Director General of The European Consumer Organisation (BEUC), says, “are often excessive and unjustified, and banning them in Europe is a great achievement for consumers.”
