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Member states have agreed their position on updates to the payment services regime, paving the way for negotiations with the European Parliament on a final version of the reforms.
The agreement was reached by representatives of member state governments in the Committee of Permanent Representatives (Coreper), the body that prepares the work of the Council of the EU.
With the Council’s position now agreed, negotiations with the European Parliament to finalise the text of the legislation can now begin.
The package includes a new Payment Services Regulation (PSR) and amendments to the existing Payment Services Directive (PSD2), which will become PSD3.
“Consumers deserve a fraud-resistant, transparent and safe payment services environment,” said Andrzej Domanski, the Polish minister for finance.
“At the same time, we need to encourage innovation in the sector. These new rules will deliver on both fronts.”
Fraud issues
In line with the Parliament’s position, the Council has agreed on a comprehensive anti-fraud framework to help tackle emerging forms of scams such as authorised push payment (APP) fraud.
For example, payment service providers (PSPs) will be required to share fraud-related information with one another and implement systems that allow customers to verify that the IBAN number of the account they are paying into matches the intended recipient’s name.
The Council has also strengthened the European Commission’s original proposals by bringing electronic communications providers, such as messaging platforms and telecoms carriers, into the fraud prevention framework.
This is something that members of the European Parliament have also been enthusiastic about, increasing the likelihood of social media platforms and telecom providers being made liable for scams originating on their networks.
In addition, the Council clarified that consumers must not be left worse off financially because of fraud and stressed the need for alignment with EU data protection rules.
Fee transparency
The new framework also introduces stricter transparency requirements for ATM transactions and payment card scheme fees, aiming to ensure that consumers and businesses can see all charges and exchange rates upfront.
As has been suggested in leaked documents from the Council in recent months, card schemes, acquiring banks, and processors will also face enhanced obligations to disclose fees clearly and consistently throughout the payment chain, with detailed standards to be set by the European Banking Authority (EBA).
Account access
On innovation, the rules aim to improve access to bank account information for new payment service providers, enabling them to offer more advanced services.
However, credit institutions retain the right to refuse or terminate accounts for payment institutions if they cannot meet anti-money laundering (AML) obligations.
Any refusals must be justified in detail, with appeal rights provided, while protecting sensitive AML information.
As with other issues such as card transparency, the Council has suggested that the EBA develop standards to harmonise how such decisions are presented.
