On July 24, 2013, the European Commission announced the adoption of broad new legislative proposals to replace the 2007 Payment Services Directive (Directive 2007/64/EC, or the PSD), that include a new Payment Services Directive (PSD2) and measures to regulate interchange fees for card-based payment transactions.
PSD2 introduces a number of important elements and improvements to the EU payment market. Security of low-cost Internet payment services will be increased by bringing new "payment initiation services"—services that operate between the merchant and the purchaser's bank— within the scope of the regime, and banks and all other payment service providers are also required to tighten security for online transactions. The proposals envisage increased consumer protection against fraud and strengthen consumer rights when sending transfer and money remittances outside Europe or when paying in non-EU currencies. The proposed regime is intended to promote the entrance of new operators and develop innovative mobile and internet payment systems in Europe.
The Commission has also proposed a draft regulation (available here) to introduce maximum levels of interchange fees for transactions based on consumer debit and credit cards and to ban surcharges on these types of cards. The proposals envisage that for an initial period of 22 months caps would be imposed on international transactions before ultimately also being applied to domestic transactions. The Commission aims, in introducing these caps, to reduce costs for retailers and consumers and to create an EU-wide payments market.
The Commission's proposed PSD2, on which it hopes that agreement can be reached by spring 2014, may be found here.
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