Towards harmonised European payment systems 

Seven years after the adoption of the Financial Services Action Plan, national rules are still heavily fragmented across the EU member states, the paper states. Different legal settings in the 27 member states are causing price rigidities, differences in national payment services and impediments for players who are interested in offering their services across borders, the authors note. 

Moreover, the current financial services situation, especially the current high transaction costs, hamper or even prevent cross-border trade. The new directive therefore seeks to address issues of market inefficiencies, lack of competition and perceived stagnating product quality. 

The paper examines the main strategic objectives of the PSD. This new directive aims to facilitate competition by removing legal barriers, increasing market transparency and setting a standardised set of right for providers and users. However, the minimum capital requirement is still perceived as the most contentious issue. 

The directive is shortly due to be adopted by the Council and transposed into national law. Even if there is a broad political consensus about the possible benefits of the Directive, the next big challenges will be the implementation, states the paper. 

Preserving competition in the area of payment systems will be an ongoing effort as the pecularities of network features induce concentration. Nevertheless, a level playing field might attract a higher number of players, and in the best-case scenario, it will create a truly pan-European market, the authors conclude.