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The Payment Services Directive: Why the European payments industry needs to prepare for significant implementation challenges
Journal of Payments Strategy & Systems,
2
(4),
400-408
(2008)
Abstract
As part of the European Commission's Lisbon Agenda, efforts to support financial market integration in the European Union have reached another milestone with the adoption of the Payments Services Directive (PSD, 2007/64/EC) in December 2007. The PSD, designed to support the banking industry's self-regulatory initiative of the single euro payments area (SEPA), constitutes a comprehensive and detailed set of conduct of business rules in the area of payment service provision. Furthermore, the PSD introduces a new category of non-bank payment service providers in order to inject more competition into the European payments market. Despite the European Commission's efforts to improve the regulatory environment within the framework of its Better Regulation Policy, the PSD unfortunately falls short of meeting Better Regulation standards. The degree of detail and complexity of the provisions creates significant regulatory challenges, which need to be carefully assessed by all existing and future players and regulators in the European payments market. In advance of member state transposition of PSD provisions into national law, this paper attempts an initial critical analysis, providing guidance on content, interpretation and implementation concerns. The understanding of the PSD is crucial in relation to the rules on harmonisation of refund rights and unique identifier primacy, which constitute the legal basis for the pan-European implementation of SEPA Credit Transfers and direct debits. It must be kept in mind, however, that, beyond SEPA all existing electronic payment products in all EU member state currencies are equally affected, thus requiring every payment service provider in Europe to ensure compliance.
Keywords: Payment Services Directive; payment service; better regulation; SEPA; payment service providers; payment institutions; execution times
The full article is available to subscribers to the journal.
Author's Biography
Ruth Wandhöfer is a Vice President and the International Payments Market Manager with Citi Global Transaction Services. Prior to that, she worked for the European Banking Federation in Brussels as policy adviser from 2003. In this role, she has had unparalleled exposure to the ongoing market developments in the payments and securities arenas. She was closely involved in the work of the European Payments Council in co-authoring the SEPA Credit Transfer scheme rulebook and active lobbyist in the successful negotiation of the European Union Payment Services Directive. Ms Wandhöfer is highly regarded across the payments industry as a subject matter expert and one of the key drivers in the evolution of SEPA through her in-depth knowledge of the regulatory, market and competitive landscape in the European payments space. Since December 2007, she has been the Chair of the Expert Group on the transposition of the Payment Services Directive, a joint initiative of the three European Credit Sector Associations, the European Banking Federation, the European Association of Co-operative Banks and the European Savings Banks Group. Prior to 2003, Ms Wandhöfer worked in financial management in the banking sector as well as in the European Commission DG Economic & Financial Affairs. She has completed studies in various countries, including an MA in Financial Economics in the UK and France and an MA in International Politics in Belgium. She is currently completing an LLM in International Economic Law.
