Implementing the revised EU Payment Services Directive

Implementing the revised EU Payment Services Directive

HM Treasury (HMT) have launched a consultation on the draft UK implementing regulations for the revised EU Payment Services Directive. Dentons’ managing associate, Nicholas Ralph, considers the proposals which aim to better protect consumers when they pay online, promote the development and use of innovative online and mobile payments and make cross-border European payment services safer.

Original news

HMT consults on the revised EU Payment Services Directive

HMT has published a consultation on the implementation of the revised EU Payment Services Directive 2015/2366/EU (PSD2) which invites views on the proposed steps that the UK government will take to make sure the UK meets its obligation to transpose PSD2. The consultation is accompanied by draft implementing legislation and closes on 16 March 2017. The Financial Conduct Authority (FCA) is to consult further in Q2 of 2017.

What is the background to HMT’s consultation?

PSD2 was published in the EU’s Official Journal on 23 December 2015 and is now in the process of being implemented in each EU Member State before the January 2018 implementation deadline.

PSD2 aims to:

  • encourage an integrated and efficient European payments market
  • provide a level playing field for payment service providers
  • promote innovative online and mobile payments, which should also encourage lower prices for payments as new market entrants challenge the pricing models of more established firms
  • make payments safer and more secure and protect consumers

Firms affected by PSD2 include:

  • all existing payment service providers (PSPs), such as banks, building societies, credit card providers, money remitters and e-money issuers
  • a range of firms that are not currently required to be FCA-authorised or regulated, including firms that provide services that are currently exempt from regulation because of the limited network, ‘digital download’ or commercial agent exemptions, and
  • third party firms who are to be given access rights to obtain data about accounts and to initiate payments using their third party software or services (subject to individual customer consents). These third party firms are called account information service providers (AISPs) and payment initiation service providers (PISPs) and PSD2 contains new provisions enabling these third party firms to access account information currently kept only within PSPs (such as banks), which is seen as crucial to driving a more competitive market in payment transactions and to reflect the use of mobile apps provided by th

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About the author:
Paul Estlin has over 15 years’ experience in the financial services regulatory arena and has worked in private practice, in house and at the regulator- at Addleshaw Goddard, Eversheds, Shoosmiths and Rosenblatt Solicitors, where Paul headed up the firm’s Financial Services Regulatory practice; in legal and compliance roles at Standard Bank and Barclays Wealth; and at the Financial Services Authority and, before that, the Personal Investment Authority.