European Commission proposed reforms for payment service rules

The European Commission proposed new requirements aiming to enhance the EU payment framework. The changes include greater transparency for currency conversion charges, more precise payee identification in account statements, and improved disclosure of ATM charges. Strong data protection measures are also emphasized.

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The European Commission is suggesting revised regulations to enhance the protection of consumers and promote competition in electronic payments. The proposed revisions aim to increase transparency and clarity for consumers by imposing new requirements on payment service providers (PSPs). Based on the evaluation of the second Payment Services Directive (PSD2), adopted in 2015 to establish rules for retail payments within the EU, the European Commission proposed revisions aiming to enhance the EU payments framework by:

  • strengthening measures against payment fraud,
  • granting non-bank PSPs access to payment systems and the right to have a bank account,
  • improving open banking functionality,
  • reinforcing enforcement powers of authorities,
  • improving consumer information and rights,
  • enhancing cash availability, and
  • merging the legal frameworks for electronic money and payment services.

Essentially, the European Commission emphasizes the need for increased transparency in credit transfers and money remittances from the EU to third countries through the new requirements. The proposal includes informing users about estimated charges for currency conversion and providing a method for comparing these charges. It also addresses transparency in payment account statements by requiring the inclusion of information to unambiguously identify the payee. Furthermore, it aims to enhance transparency in ATM charges by obliging payment service providers to provide information on applicable charges made by other ATM operators in the same Member State.

The new rules also aim to improve data protection. The proposal clarifies that PSPs can only access and process customer data necessary to provide contracted payment services. It enhances data protection in Open Banking by limiting third-party access to only essential data and requiring banks to provide users with a user-friendly “dashboard” for managing permissions. The proposal also acknowledges that processing payment transactions may involve personal data, including special categories of data, under the General Data Protection Regulation (GDPR).