New 'Payments Legislative Package' Adopted By The European Commission

On July 24th, 2013 the European Commission published the awaited proposal for a revised Payment Services Directive ("PSD2")1 having for its purpose to complete and recast the Payment Services Directive (N° 2007/64/EC, "PSD1") implemented in the Grand Duchy of Luxembourg by the Law of November 10th 2009 on payment services.2

The aims of the PSD1, which were the harmonisation of the legislation on payment services throughout the European Union (and extended to the EEA area), the implementation of new payment products (based on the SEPA products) allowing cross-border payments in Euro as simple and secure as domestic payments, and the improvement of the protection of the payment services users ("PS users"), are found in the PSD2.

If approved, PSD2 will widen the scope of application of the European legal framework related to payment services.

New players in the payment services will qualify as payment services providers ("PSP"), namely the "third-party Payment Service Providers," providing:

payment initiation services, i.e. services enabling the access to a payment account, where the payer can be actively involved in the payment initiation or the third-party PSP's software, or where payment instruments can be used by the payer or the payee to transmit the payer's credentials to the PSP holding the payment account; and, account information services, i.e. a payment service where consolidated and user-friendly information is provided to a PS user on one or several payment accounts held by the PS user with one or several PSPs. These third-party Payment Service Providers will be subject to the same regulatory requirements and supervision as those applicable to any entity already qualifying as PSP.

Furthermore, PSD2 will extend the application of rules related to the transparency and obligations of information of PS users to the "one-leg transactions." Under the PSD1, rules governing the compulsory information and transparency of the services of payments apply only to payments made from and in the EU (i.e. where the PSP of the payer and of the payee are both located in the EU) and in the Euro or another member State currency. Under the PSD2, PSPs located in the EU will have to comply with the same transparency and information obligations each time they provide a payment service, notwithstanding the fact that such payment could originate from or be made to an account located outside of the EU and notwithstanding the currency (Euro, EU or non-EU...