EUROPEAN COMMISSION

Brussels, 12.5.2023

COM(2023) 248 final

REPORT FROM THE COMMISSION

assembling specific payment account related data from Member States as required by Article 27 of the Directive 2014/92/EU of the European Parliament and of the Council on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features

TABLE OF CONTENTS

1.    INTRODUCTION    

2.    COMPLIANCE BY PAYMENT SERVICE PROVIDERS WITH ARTICLES 4, 5 AND 6            

3.    COMPLIANCE BY MEMBER STATES WITH THE REQUIREMENTS TO ENSURE THE EXISTENCE OF COMPARISON WEBSITES PURSUANT TO ARTICLE 7    

4.    NUMBER OF PAYMENT ACCOUNTS THAT HAVE BEEN SWITCHED AND THE PROPORTION OF APPLICATIONS FOR SWITCHING THAT HAVE BEEN REFUSED    

5.    NUMBER OF CREDIT INSTITUTIONS OFFERING PAYMENT ACCOUNTS WITH BASIC FEATURES, THE NUMBER OF SUCH ACCOUNTS THAT HAVE BEEN OPENED AND THE PROPORTION OF APPLICATIONS FOR PAYMENT ACCOUNTS WITH BASIC FEATURES THAT HAVE BEEN REFUSED    

6.    CONCLUSION    

1.    INTRODUCTION

The Payment Accounts Directive (the PAD or the Directive) 1 entered into force in September 2014. Member States had until 18 September 2016 to adopt and publish the laws, regulations and administrative provisions necessary to comply with the Directive. Under Article 27 of the Directive, the Commission is required to prepare a report (for the first time by 18 September 2018 and every two years) providing the following information:

1.compliance by payment service providers with Articles 4, 5 and 6;

2.compliance by Member States with the requirements to ensure the existence of comparison websites pursuant to Article 7;

3.the number of payment accounts that have been switched and the proportion of applications for switching that have been refused;

4.the number of credit institutions offering payment accounts with basic features, the number of such accounts that have been opened and the proportion of applications for payment accounts with basic features that have been refused.

As set out in Article 27, the report is based on information provided by Member States. However, there are certain gaps in the data received and reported (e.g. when information was not available in a Member State). Also, data collection methodologies and sources may have varied across Member States, which may make comparisons and assessment of the data difficult.

This is the first Article 27 report 2 which covers the period from 2016 to 2021. In addition to this report, the Commission has simultaneously adopted the report on the application of the Directive, as required under Article 28.

2.COMPLIANCE BY PAYMENT SERVICE PROVIDERS WITH ARTICLES 4, 5 AND 6

Chapter II of the Directive lays down rules on the comparability of fees connected with payment accounts. As laid down in the various recitals, Chapter II pursues two aims: to improve and develop the internal market for retail banking while ensuring that consumers are able to understand fees so that they can compare offers and make informed decisions.

The first step towards achieving these two goals is through defining the standardised terminology referred to under Article 3 of the Directive. Through an integrated and step-by-step approach, Member States are now equipped with a list of the most representative services linked to a payment account and subject to a fee. These standardised terms also serve as the basis for the remaining articles of Chapter II in the sense that, in order to comply with the respective articles of Chapter II, payment service providers need to use the agreed standardised terms.

In line with Article 27 of the Directive, Member States have provided the following information on Articles 4, 5, and 6 concerning the level of compliance by payment service providers.

a)Article 4 (Fee information document and glossary)

Article 4 of the Directive provides that, ‘in good time before entering into a contract for a payment account with a consumer, payment service providers provide the consumer with a fee information document on paper or another durable medium containing the standardised terms’ and ‘the corresponding fees for each service’ the provider offers. Article 4, through an Implementing Regulation 3 , also lays down precise rules on the actual presentation of the fee information document and obliges payment service providers to make available to consumers a glossary of at least the standardised terms and the related definitions. Article 4 also requires providers to make available to consumers, at any time, the fee information document and the glossary. This is to be in electronic form on their websites, and on their premises. Additionally, this provision requires providers to make available, on paper or another durable medium and free of charge, the fee information document and the glossary, upon a consumer request.

With regard to the level of compliance by payment service providers with the obligation to provide the fee information document to consumers in good time (Article 4(1)), the general indication is that providers are compliant. This emerges either from on-site inspections or surveys (BG, FR, CY, LV, PT, SI) or from the fact that no complaints were received, implying that in general providers seem to comply (BE, CZ, DK, DE, EE, FR, HR, IT, LT, LU, HU, MT, NL, AT, PL, RO, SK, FI).

With regard to the level of compliance by payment service providers with the obligation to make available to consumers a glossary of at least the standardised terms (Article 4(4)), the general indication is that providers are compliant. This emerges either from on-site inspections or surveys (BG, FR, CY, LV, PT, SI) or from the fact that no complaints were received, implying that in general payment service providers seem to comply (BE, CZ, DK, DE, EE, HR, IT, LT, LU, HU, MT, NL, AT, PL, SK, FI).

With regard to the level of compliance by payment service providers with the requirement to make available to consumers (and non-customers) at any time on their website and on their premises the fee information document and glossary (Article 4(5)), the general indication is that payment service providers are compliant. This emerges either from on-site inspections or surveys (BG, FR, CY, LV, PT, SI) or from the fact that no complaints were received, implying that in general payment service providers seem to comply (BE, CZ, DK, DE, EE, HR, IT, LT, LU, HU, MT, NL, AT, PL, SK, FI).

b)Article 5 (Statement of fees)

Article 5 of the Directive lays down the obligation related to providing the statement of fees. In line with this, the Commission enacted an Implementing Regulation 4  that lays out the standardised presentation format of the statement of fees and its common symbol. Article 5 provides that payment service providers provide the consumer, at least annually and free of charge, with a statement of all fees incurred for services linked to a payment account.

With regard to the level of compliance by payment service providers with the obligation to provide at least annually and free of charge a statement of all fees incurred (Article 5(1)), the general indication is that providers are compliant. This emerges either from on-site inspections or surveys (AT, SI) or from the fact that no complaints were received, implying that in general providers seem to comply (BE, BG, CZ, DK, DE, EE, IE, EL, FR, HR, IT, CY, LV, LT, LU, HU, MT, NL, PL, SK, FI).

Most Member States informed the Commission that no enforcement action based on infringements of Article 5 has been taken. A few Member States (DE, IE, FR, HU, NL) pointed to teething problems around the date of implementation. In these cases, consumer protection warnings were issued to the relevant service providers, calling for compliance with the provisions of the law without any delay. Ireland explained that, while certain retail credit institutions had issues in meeting the 31 October 2019 deadline due to system/IT constraints, workarounds and system fixes were put in place and thus no enforcement action has been taken to date. The Netherlands explained that it chose to engage with the payment service providers in an informal way (no formal enforcement actions). Portugal issued, in 2019, 227 specific orders to 115 payment service providers for failure to comply with Article 5; the irregularities and non-compliances detected referred mainly to the rules applicable to the submission of the statement of fees and to its template and completion requirements. Czechia explained that, in 2019, one of the foreign bank branches failed to provide consumers with the statement of fees by the end of February; this was due to technical difficulties. In the beginning of July, during the Czech National Bank’s investigation, the statement was sent to all clients of that branch.

c)Article 6: Information for consumers

Article 6 of the Directive obliges payment service providers, in their contractual, commercial and marketing information to consumers, to use where applicable the standardised terms. Payment service providers are allowed to use brand names in the fee information document and in the statement of fees, provided such brand names are used as a secondary designation of those services.

With regard to the level of compliance by payment service providers with the obligation to use the standardised terms in their contractual, commercial and marketing information to consumers (Article 6(1)), providers appear generally compliant. This emerges either from on-site inspections or surveys (CY) or from the absence of complaints implying (BE, BG, CZ, DK, DE, EE, EL, FR, HR, LV, LT, LU, HU, MT, NL, AT, PL, SI, SK, FI). Cyprus stated that the outcome of the survey showed that only two banks reported that work was still in progress, and they expect to fully comply with the requirements of Article 6 by the end of 2022.

With regard to how frequent it is that payment service providers include their brand name in the fee information document and the statement of fees document, the general picture is that quite often providers do include the brand name.

With regard to information on any enforcement action based on infringements of Article 6 of the Directive, all Member States that replied to this question stated that no such enforcement has taken place. France stated that it came across minor anomalies (i.e. use of non-standardised terms, diverging terms used for the same service in different documents, etc.), which can create confusion for customers. However, no sanctions have been imposed due to the fact that these infringements were considered as non-substantial.

3.COMPLIANCE BY MEMBER STATES WITH THE REQUIREMENTS UNDER ARTICLE 7 TO ENSURE THE EXISTENCE OF COMPARISON WEBSITES

Article 7 of the Directive obliges Member States to ensure that consumers have access, free of charge, to at least one website comparing fees charged by payment providers for at least the services found in the national list of the most representative services linked to a payment account and subject to a fee. This Article also provides that the comparison website may be operated either by a private operator or by a public authority, and that it be run in an independent manner. It must also: disclose the owner of the website; set out clear, objective criteria upon which the comparison is based; use plain and unambiguous language; be up-to-date; cover a significant part of the market; and provide an effective procedure to report incorrect information on published fees.

As of January 2021, nearly all Member States 5 have at least one comparison website up and running, as required under Article 7. The vast majority of Member States have tasked the setting up and subsequent updating of the table to a public authority 6 .

4.NUMBER OF PAYMENT ACCOUNTS THAT HAVE BEEN SWITCHED AND THE PROPORTION OF APPLICATIONS FOR SWITCHING THAT HAVE BEEN REFUSED

a)Payment accounts that have been switched

With the aim to facilitate the switching of payment accounts, Article 10 of the Directive obliged Member States to ensure that payment service providers provide a clear and quick switching service within the Member State.

The table below shows the information provided by Member States for the number of payment accounts that were switched in the period between 2016 and 2021. Not all information is available in all Member States, so the table has certain gaps. In particular, data for 2021 were not yet available at the time of collection for all Member States. Similarly, given the late transposition in some Member States, a switching service may not have been available in 2016 or 2017, or the data were not collected for these years. In addition, in some Member States, data have not always been collected on a yearly basis, but rather for a longer period.

Furthermore, the data provided may not be fully comparable given different methods of data collection. For instance, in some Member States, it is mandatory for credit institutions to report the data periodically (or on an ad hoc basis). However, in other Member States, data may only be collected on a voluntary basis or only from a sample of credit institutions. In addition, in some cases, the figures provided by some Member States for 2016 may include switches that took place during that year in the months before the entry into force of the Directive (e.g. if a similar switching service had already existed in those Member States before the implementation of the Directive). For all these reasons, it is difficult to draw clear conclusions.

Table 1: Number of yearly switches  7

On the basis of the data available, the table shows that there are big differences between Member States. In some Member States, a considerable number of switches have taken place (e.g. Denmark or France), with, in some cases, an increasing trend; however, the figures are very low in others (e.g. Bulgaria, Greece, Cyprus, Malta, Portugal or Romania).  8   

b)Number (and proportion) of rejected switching applications

Member States provided the information included in the table below regarding the number of applications for switching that were rejected in the period between 2016 and 2021. The proportions have been calculated by taking the number of switches that took place and the number of applications for switches that were refused as a percentage of total applications  9 . Similar to the above, information about the number of rejected switching applications is not complete. In addition, in some Member States, data on rejected applications are not collected at all. Furthermore, the data provided may again not be fully comparable given the different methods of data collection used by Member States. 

Table 2: The number and proportion of applications for switching that have been refused  10

It seems that the number of refusals for switching applications is generally low. However, there seem to be considerable differences between individual Member States, with few showing high numbers (e.g. Spain, Hungary or Romania). While credit institutions should in principle not refuse any switching, credit institutions may refuse to close a payment account, if there is an outstanding obligation  11 . Other cases could concern incomplete or incorrect switching application forms.

5.NUMBER OF CREDIT INSTITUTIONS OFFERING PAYMENT ACCOUNTS WITH BASIC FEATURES, THE NUMBER OF SUCH ACCOUNTS THAT HAVE BEEN OPENED AND THE PROPORTION OF APPLICATIONS FOR PAYMENT ACCOUNTS WITH BASIC FEATURES THAT HAVE BEEN REFUSED

In order to foster financial inclusion, Article 16 of the Directive establishes the right of access to a payment account with basic features (PABF) for all consumers legally resident in the EU. PABFs have to be offered to consumers by all credit institutions or a sufficient number of credit institutions to guarantee access thereto for all consumers in their territory.

a)Number of credit institutions offering PABFs

In most Member States, all credit institutions that provide standard payment accounts have to offer payment accounts with basic features. In other Member States (see table below), only some credit institutions, i.e. those fulfilling specific criteria set by the individual Member States, are obliged to offer payment accounts with basic features. In all these Member States, however, the obliged credit institutions seem to generally cover a large market share in terms of number of payment accounts.

Table 3: Member States  12 where only some credit institutions offer PABFs