Author: Didem Adlığ Sönmez
Introduction
The European Commission (“Commission”) has published the Proposal for a Directive of the European Parliament and of the Council on Payment Services and Electronic Money Services in the Internal Market amending Directive 98/26/EC and repealing Directives 2015/2366/EU and 2009/110/EC. This proposal includes a revision of Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market (“PSD2”) and new regulations for financial data access (“Proposal”).
The Commission has also published the Impact Assessment Report where the Commission have reported four key issues that need to be improved based on its PSD2 evaluation (“The Assessment Report”): i) payment users must be protected against fraud; ii) open banking functions imperfectly; iii) PSD 2 is applied imperfectly which results in legal uncertainty and single market fragmentation and iv) payment service providers (“PSP”) and non-bank PSPs have an unlevel playing field.
As per the Proposal PSD2 will transform into Payment System Directive 3 (“PSD3”) and Payment Services Regulation (“PSR”) will be introduced in order to secure electronic payment in the European Union (“EU”) and protect the rights of customers. The Proposal’s objective is to address and reduce payment fraud, improve consumer protection, provide consumers with more choices of PSPs, promote fair rules between banks and non-banks, optimize the functioning of open banking and increase the access to cash in shops and ATMs.
The Proposal additionally includes a legislative proposal for a framework for financial data access to manage customer data sharing in the financial sector. This article will focus on discussing the changes introduced in PSD2 and with PSR.
Objectives of PSD3 and PSR
PSD2 currently serves as the regulatory framework for managing payments in the EU. The Assessment Report indicates that PSD2’s objectives have only been partially achieved and in line with problems detected in PSD2 following objectives are aimed with the Proposal: (i) increasing the consumer protection, (ii) improving open banking practices, (iii) improving enforcement and supervision of member states, (iv) achieving providing fair access to non-bank PSPs.
