Changes from plenary report to adopted text

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2023)0367),

– 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 (C90217/2023),

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

– having regard to the opinion of the European Economic and Social Committee of 14 December 2023,

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

– having regard to the report of the Committee on Economic and Monetary Affairs (A9-0052/2024),

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.

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

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

Having regard to the opinion of the European Central Bank,

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1) Since the adoption of Directive (EU) 2015/2366 of the European Parliament and of the Council the retail payment services market underwent significant changes largely related to the increasing use of cards and digital means of payment, the decreasing use of cash and the growing presence of new players and services, including digital wallets and contactless payments. The Covid-19 pandemic and the transformations it brought to consumption and payment practices has increased the importance of having secure and efficient payments.

(2) The Communication from the Commission on a Retail Payments Strategy for the EU announced the launch of a comprehensive review of the application and impact of Directive (EU) 2015/2366 “which should include an overall assessment of whether it is still fit for purpose, taking into account market developments”.

(3) Directive (EU) 2015/2366 aimed at addressing barriers to new types of payment services and at improving the level of consumer protection and security. The evaluation of the impact and application of Directive (EU) 2015/2366 by the Commission found that Directive (EU) 2015/2366 has been largely successful with regard to many of its objectives, but also identified certain areas where the objectives of that Directive have not been fully achieved. For example, the evaluation identified the rise in new types of fraud as an issue of concern with regard to consumer protection objectives. Shortcomings have also been identified with regard to the objective of improving competition in the market thanks to the so-called ‘open banking services’ (account information services and payment initiation services) by lowering market barriers faced by third party providers. Progress towards the objective of improving the provision of cross-border payment services has also been limited, largely due to inconsistencies in supervisory practices and enforcement across the Union. The evaluation also identified factors stifling progress concerning the objective of levelling the playing field between all payment service providers.

(4) The evaluation also identified problems regarding divergent implementation and enforcement of Directive (EU) 2015/2366 which directly impact competition between payment service providers, by creating different regulatory conditions in different Member States, encouraging regulatory arbitrage. There should be no room for ‘forum shopping’ where payment services providers would choose, as ‘home country’, those Member States where the application of Union rules on payment services is more advantageous for them and provide cross-border services in other Member States which apply stricter interpretation of the rules or apply more active enforcement policies to payment service providers established there. That practice distorts competition. The Union rules on payment services should therefore be further harmonised, by incorporating rules governing the conduct of the payment services activity, including the rights and obligations of the parties involved, in a Regulation. Such rules, excluding the rules on authorisation and supervision of payment institutions, which should remain in a Directive, should be clarified and more detailed, thus minimising margins of interpretation.

(5) Even though the issuance of electronic money is regulated under Directive 2009/110/EC of the European Parliament and of the Council the use of electronic money to fund payment transactions is to a very large extent regulated by Directive (EU) 2015/2366. Consequently, the legal framework applicable to electronic money institutions and payment institutions, in particular with regard to the conduct of business rules, is already substantially aligned. To address the external coherence issues and given the fact that electronic money services and payment services are increasingly hard to distinguish, the legislative frameworks concerning electronic money institutions and payment institutions should be brought closer together. However, the licensing requirements, in particular initial capital and own funds, and some key basic concepts governing the electronic money business such as issuance of electronic money, electronic money distribution and redeemability, are distinct from the services provided by payment institutions. It is therefore appropriate to preserve these specificities when merging the provisions of Directive (EU) 2015/2366 and Directive 2009/110/EC. Since Directive 2009/110/EC is repealed by Directive (EU) XXXX [PSD3], its rules, except for the rules on authorisation and supervision, which have been incorporated in Directive (EU) XXX [PSD3], should be brought into a unified framework under this Regulation, with appropriate adjustments.

(6) To ensure legal certainty and a clear scope of application of the rules applicable to the conduct of business of providing payment and electronic money services, it is necessary to specify the categories of payment service providers which are subject to the obligations concerning the conduct of the business of providing payment services and electronic money services throughout the Union.

(7) There are several categories of payment service providers. Credit institutions take deposits from users that can be used to execute payment transactions. They are authorised pursuant to Directive 2013/36/EU of the European Parliament and of the Council. Payment institutions don’t take deposits. They may hold users funds and issue electronic money that can be used to execute payment transactions. They are authorised pursuant to Directive (EU) XXX [PSD3]. Post office giro institutions which are entitled to do so under national law may also provide electronic money and payment services. Other categories of payment service providers include the European Central Bank (ECB) and national central banks when not acting in their capacity as monetary authority or other public authorities, and Member States or their regional or local authorities when not acting in their capacity as public authorities.

(8) It is appropriate to dissociate the service of enabling cash to be withdrawn from a payment account from the activity of servicing a payment account, as the providers of cash withdrawal services may not service payment accounts. The services of issuing payment instruments and of acquiring payment transactions, which were listed together in point 5 of the Annex to Directive (EU) 2015/2366 as if one could not be offered without the other, should be presented as two different payment services. Listing issuing and acquiring services separately should, together with distinct definitions of each service, clarify that the issuing and acquiring services may be offered separately by payment service providers.

(9) The exclusion from the scope of Directive (EU) 2015/2366 of certain categories of operators of automated teller machines (ATM) has proven difficult to apply in practice. Therefore, the category of ATM operators which were excluded from the requirement to be authorised as a payment service provider under Directive (EU) 2015/2366 should be replaced by a new category of ATM operators which do not service payment accounts. While those operators are not subject to the authorisation requirements under Directive (EU) XXX [PSD3], they should however be subject to requirements on fees transparency in situations where such ATM operators levy charges for cash withdrawals.

(10) To further improve access to cash, which is a priority of the Commission, merchants should be allowed to offer, in physical shops, cash provision services even in the absence of a purchase by a customer, without having to obtain a payment service provider authorisation or being an agent of a payment institution. Those cash provision services should, however, be subject to the obligation to disclose fees charged to the customer, if any. These services should be provided by retailers on a voluntary basis and should depend on the availability of cash at the retailer.

(11) The exclusion from the scope of Directive (EU) 2015/2366 of payment transactions from the payer to the payee through a commercial agent acting on behalf of the payer or the payee has been applied very differently across Member States. The concept of commercial agents is typically defined in national civil law, which might diverge form Member State to Member State, leading to inconsistent treatment of the same services in different jurisdictions. The concept of commercial agents under that exclusion should therefore be harmonised and clarified by making reference to the definition of commercial agents as laid down in Council Directive 86/653/EEC. In addition, further clarity should be provided on the conditions under which payment transactions from the payer to the payee through commercial agents may be excluded from the scope of this Regulation. This is achieved by requiring that agents should be authorised via an agreement with either the payer or the payee to negotiate or conclude the sale or purchase of goods or services on behalf of only the payer or only the payee, but not both of them, regardless of whether or not the commercial agent is in the possession of client’s funds. Electronic commerce platforms that act as commercial agents on behalf of both individual buyers and sellers without buyers or sellers having any real margin or autonomy to negotiate or to conclude the sale or purchase of goods or services should not be excluded from the scope of this Regulation. The European Banking Authority (EBA) should develop guidelines on the exclusion for payment transactions from the payer to the payee through a commercial agent to provide further clarity and convergence among competent authorities. Those guidelines may include a repository of use cases typically covered by the commercial agent exclusion.

(12) The exclusion from the scope of Directive (EU) 2015/2366 related to specific-purpose instruments has been applied differently across Member States, although service providers whose instruments were covered by that exclusion were required to notify their activity to the competent authorities. The EBA provided further guidance in its ‘Guidelines on the limited network exclusion under PSD2’ of 24 February 2022. Despite these attempts to clarify the application of the exclusion related to specific-purpose instruments there are still service providers that provide services which involve substantial payment volumes and a variety of products offered to a large number of customers that seek to make use of that exclusion. In these cases, consumers do not benefit from the necessary safeguards and the services should not benefit from the exclusion for specific-purpose instruments. Therefore, it is necessary to clarify that it should not be possible to use the same specific-purpose instrument to make payment transactions to acquire goods and services within more than one limited network or to acquire an unlimited range of goods and services.

(13) To assess whether a limited network should be excluded from scope, the geographical location of the points of acceptance of such network as well as the number of the points of acceptance should be considered. Specific-purpose instruments should allow the holder to acquire goods or services only in the physical premises of the issuer, whereas usage in an online store environment should not be covered by the notion of premises of the issuer. Specific-purpose instruments should include, depending on the respective contractual regime, cards that can only be used in a particular chain of stores or a particular shopping centre, fuel cards, membership cards, public transport cards, parking ticketing, meal vouchers or vouchers for specific services, which may be subject to a specific tax or labour legal framework designed to promote the use of such instruments to meet the objectives laid down in social legislation, such as childcare vouchers or ecological vouchers. At the same time, the Member States’ regulatory environment for vouchers should ensure the acceptability of such vouchers.

(14) The exclusion relating to certain payment transactions by means of telecom or information technology devices should focus specifically on micro-payments for digital content and voice-based services. A clear reference to payment transactions for the purchase of electronic tickets should be kept to so that customers can still easily order, pay for, obtain and validate electronic tickets from any location and at any time using mobile phones or other devices. Electronic tickets allow and facilitate the delivery of services that consumers could otherwise purchase in paper ticket form and include transport, entertainment, car parking and entry to venues, but exclude physical goods. Payment transactions by a specified provider of electronic communications networks performed from or via an electronic device and charged to the related bill to collect charitable donations should also be excluded. It should apply only where the value of payment transactions is below a specified threshold.

(15) The Single Euro Payments Area (SEPA) has facilitated the creation of Union wide ‘payment factories’ and ‘collection factories’, allowing for the centralisation of payment transactions of the same group. In that respect, payment transactions between a parent undertaking and its subsidiary or between subsidiaries of the same parent undertaking which are provided by a payment service provider belonging to the same group should be excluded from the scope of this Regulation. The collection of payment orders and the receipt of funds on behalf of a group by a parent undertaking or its subsidiary for onward transmission to another payment service provider should not be considered as a payment service.

(16) The provision of payment services requires the support of technical services. Those technical services include the processing and storage of data, payment gateway services, trust and privacy protection services, data and entity authentication, information technology (IT) and communication network provision, provision and maintenance of consumer-facing interfaces used to collect payment information, including terminals and devices used for payment services. Payment initiation services and account information services are not technical services.

(17) Technical services do not constitute payment services as such as technical service providers do not enter at any time into possession of the funds to be transferred. They should therefore be excluded from the definition of payment services. Those services should however be subject to certain requirements, such as those on liability for failure to support the application of strong customer authentication▐.

(18) Taking into account the rapid evolution of the retail payments market and the emergence of new payment services and payment solutions, it is appropriate to adapt some of the definitions under Directive (EU) 2015/2366 to the realities of the market in order to ensure that Union legislation remains fit for purpose and technology neutral.

(19) The clarification of the process and the various steps to be followed for the execution of a payment transaction is of significant importance for the rights and obligations of the parties involved in a payment transaction and for the application of strong customer authentication. The process leading to the execution of a payment transaction is either initiated by the payer or on his/her behalf, or by the payee. The payer initiates the payment transaction by placing a payment order. Once the payment order is placed, the payment service provider checks if the transaction has been authorised and authenticated including, where applicable, by applying strong customer authentication, and the payment service provider then validates the payment order. The payment service provider then takes the relevant steps to execute the payment transaction, including the transfer of funds.

(20) Given the diverging views identified by the Commission in it its review of the implementation of Directive (EU) 2015/2366 and highlighted by the European Banking Authority (EBA) in its opinion of 23 June 2022 on the review of Directive (EU) 2015/2366, it is necessary to clarify the definition of a payment accounts. The determining criterion for the categorisation of an account as payment account lies in the ability to perform daily payment transactions from such an account. The possibility of making payment transactions to a third party from an account or of benefiting from such transactions carried out by a third party is a defining feature of the concept of payment account. A payment account should therefore be defined as an account that is used for sending and receiving funds to and from third parties. Any account that possesses those characteristics should be considered a payment account and should be accessed for the provision of payment initiation and account information services. Situations where another intermediary account is needed to execute payment transactions from or to third parties should not fall under the definition of a payment account. Savings accounts are not used for sending and receiving funds to or from a third party, excluding them therefore from the definition of a payment account.

(21) Given the emergence of new types of payment instruments and the uncertainties prevailing in the market as to their legal qualification, the definition of a ‘payment instrument’ should be further specified by providing some examples to illustrate what constitutes or does not constitute a payment instrument, bearing in mind the principle of technology neutrality.

(22) Despite the fact that Near-Field Communication (NFC) enables the initiation of a payment transaction, considering it as a fully-fledged ‘payment instrument’ would pose some challenges, for example for the application of strong customer authentication for contactless payments at the point of sale and of the payment service provider’s liability regime. NFC should therefore rather be considered as a functionality of a payment instrument and not as a payment instrument as such.

(23) The definition of ‘payment instrument’ under Directive (EU) 2015/2366 referred to a ‘personalised device’. Since there are pre-paid cards where the name of the holder of the instrument is not printed on the card, applying that reference could leave those types of cards outside the scope of the definition of a payment instrument. The definition of ‘payment instrument’ should, therefore, be amended to refer to ‘individualised’ devices instead of ‘personalised’ ones, clarifying that pre-paid cards where the name of the holder of the instrument is not printed on the card fall within the scope of this Regulation.

(24) So-called digital ‘pass-through wallets’, involving the tokenisation of an existing payment instrument, for example a payment card, are to be considered as technical services and should thus be excluded from the definition of payment instrument as, in the Commission’s view, a token cannot be regarded as being itself a payment instrument but, rather, a ‘payment application’ within the meaning of Article 2(21) of Regulation (EU) 2015/751 of the European Parliament and of the Council. However, some other categories of digital wallets, namely pre-paid electronic wallets such as ‘staged-wallets’ where users can store money for future online transactions, should be considered a payment instrument and their issuance a payment service.