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06/12/2016

Adoption of EU payment laws passed on to next Parliament

Euro & Finance

Adoption of EU payment laws passed on to next Parliament

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Time has run out for the current European Parliament to adopt the updated Payment Services Directive, the Assembly's chief spokesperson confirmed during a public debate in Brussels on Wednesday (29 January). EurActiv Italy reports.

Spokesman Jaume Duch Guillot said the directive and related regulation on interchange fees, which are currently under discussion in the Parliament's economic and monetary affairs committee, will be passed on to the next Parliament.

“We have just concluded the stage of tabling amendments to the report,” Duch Guillot explained, saying this left too little time for adopting the laws before the Parliament's last plenary session in April.

“You will have to wait for the election in May and the establishment of new members before the proposal is discussed and voted on in plenary. The debate on the issue could then resume in conjunction with the Italian Presidency,” Duch Guillot added.

The Payment Services Directive (PSD) aims to create a true European market for payments that would ideally lower the costs for both consumers and payment institutions of carrying out payments. 

Spanish MEP Pablo Zalba Bidegain (European People's Party), who is in charge of steering the Parliament's position on the proposal, had tabled a first report in November, questioning the European Commission's proposed reduction of interchange fees on debit and credit card transactions.

Proposals to update the PSD, which dates back to 2007, were published by the Commission in July 2013. At the same time the Commission published a draft regulation on multilateral interchange fees (MIFs) levied when payments are made cross-border or within member states.

The goal is to update the rules on payment services in light of the changes occurring in recent years, especially with regards to the growing use of online payments.

One of the key challenges of the proposal is not regulatory but cultural, with widely varying payment practices across EU member states, which sometimes reflect different national traditions and behaviours.

The PSD is often mentioned in the same breath as the Single Euro Payments Area (SEPA) but the two are in fact separate, because SEPA began as a voluntary initiative of the European banking industry. The industry created a consortium, the European Payments Council, to define how SEPA would work in practice.

Background

The Payment Services Directive (PSD) was adopted by the EU Council of Ministers in March 2007, but an explosion in e-commerce through the internet and the ownership and use of smartphones has taken place since then.

In response to the challenge posed by technology to traditional payments methods, the Commission published a green paper called: ‘Towards an integrated European market for card, internet and mobile payments,’ as a precursor to further rules changes.

Following a consultation period an updated Payment Services Directive (PSD II) was published this summer (July 24), with a separate regulation on multilateral interchange fees (MIFs).

>> Read LinksDossier Payment Services Directive: The new landscape

Timeline

  • 22-25 May: European elections
  • 1-3 July: First plenary session of newly elected European Parliament

Further Reading