On 13 November 2007, the European Parliament and the Council of the European Union adopted Directive 2007/64/EC on payment services in the internal market (the “Payment Services Directive (PSD)”). The Directive had to be implemented by all Member States not later than 1 November 2009.
The main aims of the PSD were (i) to create the legal foundation for the formation of a single market for payments in the European Union, and (ii) to “establish a modern and comprehensive set of rules applicable to all payment services in the European Union”. Moreover, the Directive was set to create secure and efficient cross-border payments to mimic those executed on national level as well as to promote effective competition by opening the markets for new entrants. Last but not least, the PSD laid down the foundations for the Single Euro Payments Area (the “SEPA”) – a system for the making of payments denominated in Euro in the European Union under the same conditions (disregarding the Member State where the payment is respectively made from or made to).
Consequently, in 2012 the European Commission conducted a review of the EU’s payments framework and it published: (i) a Green Paper titled “Towards an integrated European market for card, internet and mobile payments”, and (ii) the Single Market Act II, which prescribed that the modernization of the legislation concerning retail payments is one of the cornerstones for the Commission. These initiatives came as a result of the mounting data on the ongoing change in the way European citizens shop and pay. However, the EU market for cards, internet and mobile payments continued to be fragmented as well as facing serious hindrances in terms of costs, technical infrastructures, inter-bank fees, competition, development and growth, etc.
Thus, in line with the development of the European Union and its aim of creating a more cohesive single market, on 24 July 2013 the European Commission adopted a revised legislative payment package, including an amended version of the PSD. The revised version of the PSD has several targets, including:
- Improving the security of all online transactions as well as facilitating the use of low-cost internet payment services;
- Better protection of consumers against abuses and mishandling of their debit and credit cards;
- Increase of consumer rights upon transfers of money outside the EU and/or making payments in non-EU currencies;
- Promotion of the implementation of new mobile and internet making payments as well as competition on the market/entering of new players thereon.
Moreover, the PSD will introduce maximum caps on interchange fees for transactions originating from consumer debit and credit cards as well as it will ban the so-called surcharges on these kinds of cards (surcharges are the fees imposed by some retailers for the use of a card for payment).
Consequently, on 5 December 2014, the Council of Europe agreed on a General Approach with respect to the revised version of the Payment Services Directive. This will initiate the process of tri-party negotiations between the Council of Ministers, the Commission, and the Parliament, which will eventually result in the implementation of a new version of the PSD. In addition to the abovementioned points, the new Directive will also task the European Banking Authority with coming up of guidelines and proposing regulatory technical standards in various fields. The Directive shall be adopted under the ordinary legislative procedure.