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Payment services in the European Union

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Payment services in the European Union

Consumers need to be sure that the payments they make throughout the European Union (EU) are easy, efficient and secure. To meet this objective, the EU has set up a common framework for payment services, which replaces EU countries’ national rules.

ACT

Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC.

SUMMARY

Consumers need to be sure that the payments they make throughout the European Union (EU) are easy, efficient and secure. To meet this objective, the EU has set up a common framework for payment services, which replaces EU countries’ national rules.

WHAT DOES THIS DIRECTIVE DO?

It lays down rules for payment services such as credit transfers, direct debits and card payments. These rules include information requirements for payment services providers, as well as rights and obligations linked to the use of payment services.

KEY POINTS

Authorisation

An institution that offers payment services must obtain an authorisation to carry out its payment activities throughout the EU. Each EU country has a national body responsible for granting authorisations. The institution is authorised only if it has robust governance arrangements in place for its business and holds a certain amount of capital.

Information requirements

Payment services providers must provide a range of clear information to the users of their services.

Prior to a payment service, they have to communicate information related to fees, complaint procedures and all charges payable in an easily understandable way.

After the execution of a payment transaction, they have to provide information to the payer, including:

the reference of the payment transaction and of the payee;

the payment amount;

the fees and commissions related to the transaction.

They have to communicate information to the payee once the transaction has taken place.

The law also lays down specific rules about the information that payment services providers have to give when transactions are covered by a contract governing the future execution of successive payment transactions.

Rights and obligations

A payment transaction in euros or in the currency of an EU country outside the euro area is executed within 1 working day.

Payment services providers are fully liable to payers for the correct execution of payment transactions. When a transaction is not executed or is defective, the payer’s payment services provider must correct it or refund the relevant amount to the payer. In the event of the misuse of a payment instrument by someone other than the payer, such as a credit card, the payer bears the losses up to a maximum amount of €150.

The law also lays down rules for refunds when payment transactions have been wrongly authorised.

WHEN DOES THE DIRECTIVE APPLY?

From 25 December 2007.

’KEY TERM

Payment services are business activities that:

enable cash to be placed on or withdrawn from a payment account, as well as the operation of that account;

execute payment transactions (e.g., standing orders, direct debits, etc.) both on payment accounts or by electronic means;

issue and/or acquire payment instructions;

money remittance.

For more information, see the European Commission’s Payment Services website.

REFERENCES

Act

Entry into force

Deadline for transposition in the Member States

Official Journal

Directive 2007/64/EC

25.12.2007

1.11.2009

OJ L 319, 5.12.2007, pp. 1-36

Corrigendum

-

-

OJ L 187, 18.7.2009, pp. 5-5

Amending Act(s)

Entry into force

Deadline for transposition in the Member States

Official Journal

Directive 2009/111/EC

7.12.2009

31.10.2010

OJ L 302 of 17.11.2009, pp. 97-119

RELATED ACTS

Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (OJ L 257 of 28.8.2014, pp. 214-246).

Last updated: 15.04.2015

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