Changes from plenary report to adopted text

RemovedDRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

AddedP9_TA(2024)0065

Removedon the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 260/2012 and (EU) 2021/1230 as regards instant credit transfers in euro

AddedInstant payments in euro

Removed(COM(2022)0546 – C90362/2022 – 2022/0341(COD))

AddedCommittee on Economic and Monetary Affairs

AddedPE742.661

AddedEuropean Parliament legislative resolution of 7 February 2024 on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 260/2012 and (EU) 2021/1230 as regards instant credit transfers in euro (COM(2022)0546 – C9-0362/2022 – 2022/0341(COD))

▸7 unchanged paragraphs

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2022)0546),

– having regard to Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90362/2022),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the opinion of the European Central Bank of 1 February 2023,

– having regard to the opinion of the European Economic and Social Committee of 22 February 2023,

Added– having regard to the provisional agreement approved by the responsible committee under Rule 74(4) of its Rules of Procedure and the undertaking given by the Council representative by letter of 29 November 2023 to approve Parliament’s position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

▸5 unchanged paragraphs

– having regard to Rule 59 of its Rules of Procedure,

– having regard to the report of the Committee on Economic and Monetary Affairs (A9-0230/2023),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 1

RemovedAMENDMENTS BY THE EUROPEAN PARLIAMENT*

AddedP9_TC1-COD(2022)0341

Removedto the Commission proposal

AddedPosition of the European Parliament adopted at first reading on 7 February 2024 with a view to the adoption of Regulation (EU) 2024/… of the European Parliament and of the Council amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards instant credit transfers in euro

Removed---------------------------------------------------------

RemovedREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

Removedamending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and 2014/92/EU as regards instant credit transfers in euro

(Text with EEA relevance)

Change 2

RemovedTHE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Added(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Regulation (EU) 2024/886).

RemovedHaving regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

RemovedHaving regard to the proposal from the European Commission,

RemovedAfter transmission of the draft legislative act to the national Parliaments,

RemovedHaving regard to the opinion of the European Economic and Social Committee,

RemovedHaving regard to the opinion of the European Central Bank,

RemovedActing in accordance with the ordinary legislative procedure,

RemovedWhereas:

Removed(1) Regulation (EU) No 260/2012 of the European Parliament and of the Council provides the foundation for the single euro payments area (SEPA). To create favourable conditions for increased competition, in particular for payments at point of interaction (PoI), the SEPA project should be continuously updated to reflect innovation and market developments in payments, promote the development of new Union-wide payment products, and facilitate access for new market entrants.

Removed(2) In 2017, a Union-wide scheme for the instant execution of credit transfers in euro was agreed between payment service providers (PSPs) under the auspices of the European Payments Council. The efforts of the European payments industry have not proven sufficient to ensure a high uptake at Union level of instant credit transfers in euro. Only a widespread and rapid increase in that uptake can unlock the full-scale network effects of instant credit transfers in euro, leading to benefits and economic efficiency gains for payments services users (PSUs) and providers, reduced market concentration, increased competition and choice of electronic payments, in particular for cross-border payments at PoI.

Removed(3) Regulation (EU) No 260/2012 established technical and business requirements for credit transfers and direct debits in euro. Instant credit transfers in euro are a relatively new category of credit transfers in euro which emerged on the market only after the adoption of that Regulation. It is therefore necessary to provide for specific requirements for instant credit transfers in euro, in addition to the general requirements applicable to all credit transfers to ensure the proper functioning and strengthening of the internal market, as well as facilitate further integration of the Union payments market.

Removed(3a) To make instant payments more accessible, they should also be available as basic features in a payment account. This Regulation therefore also amends Directive 2014/92/EU of the European Parliament and of the Council. Moreover, to widen the benefits of instant credit transfers to PSUs, Member States whose currency is not the euro should be able to apply this Regulation to domestic instant credit transfers in their own currency.

Removed(4) A number of national regulatory solutions have already been adopted or proposed to increase the uptake of instant credit transfers in euro, including by strengthening PSUs’ protection from sending funds to an unintended payee or specifying the process of compliance with obligations flowing from Union sanctions. Differences in those national regulatory solutions and the absence of common Union-wide rules pose a risk of fragmentation of the internal market, thus increasing the compliance costs due to different sets of national regulatory requirements, and making the execution of cross-border instant credit transfers more difficult. Uniform rules on instant credit transfers in euro, including cross-border transfers, should therefore be introduced to prevent such obstacles from arising.

Removed(5) Prior to the emergence of instant credit transfers, payment transactions were generally bundled by PSPs and submitted to a retail payment system for clearing and settlement purposes at pre-specified times. However, in retail payment systems currently used to process instant credit transfers in euro, payment transactions are submitted individually, processed in real time and round the clock. To reflect this, it is necessary to amend the definition of ‘retail payment system’.

Removed(6) Ensuring that all PSUs in the Union are able to place payment orders for and receive instant credit transfers in euro is a precondition for an increased uptake of such transactions. Currently, at least one third of PSPs in the Union do not offer instant credit transfers in euro. Moreover, the rate at which PSPs have been adding instant credit transfers to their services has been, over the last few years, too slow, which hinders further integration of the Union’s internal payments market, undermines strategic autonomy in the Union payments market and limits potential benefits for PSUs. Therefore, PSPs providing credit transfer services in euro to their PSUs should be required to offer the service of sending and receiving instant credit transfers in euro.

Removed(7) To create an integrated market for instant credit transfers in euro, it is essential that such transactions are processed in accordance with a common set of rules and requirements. An instant credit transfer in euro enables funds to be credited to the account of the payee within seconds and round the clock. The round the clock availability every day of the year is an intrinsic feature of instant credit transfers. Therefore, it is appropriate that the definition of instant credit transfers refers to the specific conditions that they should meet regarding the time of receipt of payment orders, processing, crediting and value dating.

Removed(7a) The European Central Bank (ECB) and national central banks, when not acting in their capacity as monetary authorities or other public authorities, should be able to limit their offer to PSUs of a payment service of sending instant credit transfers in euro to the period during which the ECB and national central banks receive and send non-instant credit transfers in euro, where such limitation is necessary to ensure compliance with Article 123 TFEU.

Removed(8) There is a variety of interfaces through which PSUs can place a payment order for a credit transfer in euro, including via online banking, a mobile application, an automated teller machine, a self-service terminal, in a branch, or by phone. To ensure that all PSUs have access to instant credit transfers in euro, there should be no difference in terms of the interfaces that offer PSUs the possibility to place payment orders for instant and other types of credit transfer transactions. Moreover, where it is possible for a PSU to submit to a PSP payment orders for credit transfers packaged together, that same possibility should also be available with respect to instant credit transfers in euro. PSPs should be able to offer all credit transfers in euro initiated by their PSUs as instant by default.

Removed(8a) Since some payment initiation channels, such as bank retail locations, are not available all the time, the time of receipt of a paper-based payment order should be considered to take place at the moment when the payment order is inserted into the internal system of the payer’s PSP, which should occur as soon as such payment initiation channels are available.

Removed(8b) Where a PSU submits a package of multiple payment orders for instant credit transfers to its PSP, that PSP should immediately start to unpack that package so as to turn it into individual instant credit transfer transactions. The time of receipt of a payment order submitted in a package of multiple payment orders should be the moment when the ensuing individual payment transaction has been unpacked. The payer’s PSP should immediately transmit the individual instant credit transfer transactions either simultaneously or in sequence. That transmission should occur without prejudice to possible solutions to be provided by retail payment systems which allow for the conversion of packages of multiple payment orders for instant credit transfers into individual instant payment transactions.

Removed(8c) Where a payment order for an instant credit transfer in euro is submitted from a payment account that is not denominated in euro, the time of receipt should be the moment when the PSP, immediately upon receiving that payment order, converts into euro the amount of the transaction from the currency in which the payment account is denominated.

Removed(9) Payment institutions and electronic money institutions should contribute to facilitating the uptake of instant credit transfers in euro. It is therefore appropriate to allow those institutions to participate in a payment system designated in accordance with Directive 98/26/EC of the European Parliament and of the Council, thus enabling them to access settlement systems and to offer the service of sending and receiving instant credit transfers in euro.

Removed(10) PSUs are very sensitive to the level of charges for substitutable payment methods. The level of charges can therefore steer them towards or away from a given payment method. In those national markets where higher transaction-level charges for instant credit transfers in euro compared to charges for other types of credit transfers in euro have been applied, the uptake of instant credit transfers is low. That has prevented the attainment of the critical mass of instant credit transfers in euro that is necessary to realise the full network effects for PSPs and PSUs alike. All types of charges applied to payers and payees for the execution of instant credit transfers in euro, including per transaction charges or lump sum charges, should therefore not exceed such charges applied to the same PSU for corresponding types of other credit transfers in euro. It is essential to guarantee, through a proper supervision framework, that PSPs do not increase the charges for the corresponding types of other credit transfers in euro with the aim of circumventing that requirement. When identifying corresponding types of credit transfers, it should be possible to use criteria including the PSU interface or the payment instrument used to initiate the payment, customer status and, where relevant, whether the payment is national or cross-border.

Removed(10a) As an additional safeguard against fraud, PSPs should allow PSUs the possibility of setting a maximum amount for instant credit transfers in euro. Payers’ PSPs should not execute instant credit transfers where a payment order exceeds that maximum amount. PSUs should be able to modify the maximum amount at any time prior to the initiation of an instant credit transfer.

Removed(11) Security of ▌credit transfers in euro, both regular and instant, is fundamental for increasing PSUs’ confidence in such services and ensuring their use. Therefore, PSPs should have in place robust and up-to-date fraud detection and prevention measures, with a certain degree of flexibility in defining the measures that are most suitable to deal with new challenges. Payers intending to send a credit transfer to a given payee may, as a result of fraud or error, provide a payment account identifier which does not correspond to an account held by that payee. Under Directive (EU) 2015/2366 of the European Parliament and of the Council, the only determinant of the correct execution of the transaction with respect to the payee is the unique identifier, and PSPs are not required to verify the name of the payee. Both for regular and instant credit transfers, in case of fraud or error, it may not be possible for the payer to recover the funds before they are credited to the payee’s account. PSPs operating in the Union should therefore, without charging the PSUs any additional charges or fees, provide a service to verify whether there is any discrepancy between the payment account identifier of the payee and the name of the payee provided by the payer. Where the PSP allows the payer to place a payment order for an instant credit transfer by providing the payment account identifier and other data elements allowing to unambiguously identify the payee, such as a fiscal number, European unique identifiers (EUID) or legal entity identifiers (LEIs), PSPs should be able to perform the verification service based on such other data elements. The payer’s PSP should notify the payer placing a payment order for a credit transfer in euro about any such discrepancies detected by the payee’s PSP. To avoid undue frictions or delays in the processing of the transaction instantly, the payer’s PSP should provide such notification within no more than a few seconds from the moment the payer provided the payee information. To allow the payer to decide whether to proceed with the intended transaction, the payer’s PSP should provide such notification before the payer authorises the transaction.

Removed(11a) Certain credit transfer initiation solutions may be available allowing payers to place a payment order by inserting only the payment account identifier, or even, as a result of the use of QR codes, services of payment initiation service providers or proxies such as telephone numbers or email addresses, without inserting the payment account identifier at all. PSPs providing such initiation solutions should be liable to the payer for the correct identification of the payee to whom the credit transfer transaction has been requested by the payer. Therefore, PSPs should maintain robust internal procedures supervised by national competent authorities in order to ensure correct identification of the payee.

Removed(12) Some attributes of the name of the payee to whose account the payer wishes to make a credit transfer may increase the likelihood of a discrepancy being detected by the PSP, including the presence of diacritics or different possible transliterations of names in different alphabets, differences between habitually used names and names indicated on formal identification documents in case of natural persons, or differences between commercial and legal names in case of legal persons. To avoid undue frictions in the processing of instant credit transfers in euro and facilitate the payer’s decision on whether to proceed with the intended transaction, PSPs should indicate the degree of match, including by indicating in the notification that there is ‘no match’ or ‘close match’. In the case of a close match, PSPs should indicate to the payer the name of the payee associated to the payment account identifier provided by the payer.

Removed(13) Authorising a payment transaction where the PSP has detected a discrepancy and has notified that discrepancy to the PSU can result in the funds being transferred to an unintended payee. In such cases, PSPs should not be held liable for the execution of the transaction to an unintended payee, as laid down in Article 88 of Directive (EU) 2015/2366. PSPs should inform PSUs about the implications for PSP liability and PSU refunds rights of their choice to ignore the notified discrepancy. ▌

Removed(14) It is of critical importance that PSPs effectively comply with their obligations stemming from Union sanctions against persons, bodies or entities that are subject to an asset freeze or a prohibition to make funds or economic resources available to it, or for its benefit, either directly or indirectly, pursuant to restrictive measures adopted in accordance with Article 215 TFEU (listed persons or entities). Union law, however, does not lay down rules on the procedure or tools to be used by PSPs to ensure their compliance with those obligations. PSPs thus apply various methods, based on their individual choice or on the guidance provided by the national authorities concerned. The practice of complying with obligations stemming from Union sanctions by screening the payer and the payee involved in each credit transfer transaction, either national or cross-border, leads to a very high number of credit transfers being flagged as potentially involving listed persons or entities. However, the large majority of such flagged transactions turn out, after verification, not to involve any such persons or entities. Due to the nature of instant credit transfers, it is impossible for PSPs to verify, within short time limits, such flagged transactions instantly and, as a result, they are rejected. That situation creates operational challenges for PSPs to offer instant credit transfers to their PSUs across the Union in a reliable and predictable way. To provide for greater legal certainty, increase the efficiency of PSPs’ efforts to comply with their obligations stemming from Union sanctions in the context of instant credit transfers in euro, and to prevent unnecessary hindering of such transactions, PSPs should thus verify, at least daily, whether their PSUs are listed persons or entities, and should no longer apply transaction-based screening.

Removed(15) To prevent the initiation of instant credit transfers from payment accounts belonging to listed persons or entities and to immediately freeze funds sent to such accounts, PSPs should carry out verifications of their PSUs as soon as possible following the entry into force of a new restrictive measure adopted in accordance with Article 215 TFEU providing for asset freeze or prohibition of making funds or economic resources available, thus ensuring that PSPs comply with their obligations stemming from Union sanctions in an effective manner.