MEPs want to enhance fraud protection and access to cash in payment services

Users should be better protected from fraud and misuse of their data

All fees and charges for payment services should be transparent

Provisions to ensure access to cash in member states, especially in remote or rural areas

Level playing field between banks and non-bank payment service providers

MEPs adopted their proposals for an open and competitive payment service in the EU, with strong customer protection against fraud and data breaches.

On Tuesday, Parliament proposed changes to the Payment Services Regulation -adopted with 511 votes to 22 and 75 abstentions and to the directive -adopted with 484 votes to 8 and 118 abstentions-. MEPs are aiming for more harmonised payment and electronic money services in the EU. The rules would apply to all payment service providers (PSP), including banks, post office giro institutions, and payment institutions.

Security of transfers and data

To protect transfers, the unique identifier (a combination of letters, numbers or symbols specified by a PSP or a user, such as IBAN) should be verified free of charge and PSPs should ensure strong customer authentication. A PSP failing to apply appropriate fraud preventing mechanisms would be responsible for compensating customers’ losses resulting from fraud, according to MEPs.

Customers must give permission for their personal data to be processed and they should be able to opt out from data sharing or withdraw access to their data.

Transparent fees

Customers should get clear, transparent, and accessible information about all charges prior to a payment transaction, including currency conversions charges or any fixed fees for cash withdrawal.

Better access to cash

MEPs want to assure better access to cash, especially in remote or rural areas. To achieve this, retail shops providing cash independently from a purchase (up to €100) should be exempt from the rules, while ATMs that enable cash withdrawals but do not service payment accounts should be subject to lighter standards.

New types of payment services

New players should be able to enter the EU payment services sector, in the area of internet payments subject to authorisation, which would allow customers to pay for online shopping without a credit card. Such services are already on offer in some member states (Sofort, IDeal or Trustly) but until now, the providers were not regulated at EU level. New rules should address liability, security and data protection concerns. The same conditions would apply across the EU to the activity of providing payment services, including electronic money services and the legislation should remain technology neutral.

Quotes

Marek BELKA (S&D, PL), responsible for the regulation said: "With this file we do not only protect consumers, from various types of fraud, oblige payment service providers to deliver higher transparency levels for ATM withdrawals or give consumers better control over who has access to their data. We also ensure that online platforms (such as Meta or Google) are co-responsible for payment fraud happening through them. These are only some specific examples of what is in the Parliament’s position on the Payment Services Regulation. With this file we prove to the EU citizens, even just before the elections, that we have their backs.

We prove eurosceptics that they are wrong and that the EU is an added value for each and every one of us, giving a strong mandate for the upcoming Parliament to negotiate with the Council."

Ondřej KOVAŘÍK (Renew, CZ), responsible for the directive said:” In the updated Payment Services Directive, we enhance transparency as regards ATM withdrawals, with any fees charged having to be displayed to the customer from the outset. We have also made sure to reinforce the role of cash in our society, by allowing for retail stores to offer cash withdrawal services to customers, making cash more accessible, particularly in more rural regions where ATM numbers are dwindling. Finally, we have made sure that the authorisation procedure for payment providers is clearer and more simple, with better harmonisation across the EU in this regard”.

Next steps

Parliament has now closed the first reading on these pieces of legislation. Work will be followed up by the new Parliament after the 6 - 9 June European elections.

By adopting the law, Parliament is responding to the demands of citizens put forward in the conclusions of the Conference of the Future of Europe, notably proposals 12(2), (4) and 35(7) on interconnection of payment systems and telecommunications and digital innovation.