Payment Matters: No 7 - UK News

• Financial institutions

24-02-2014

The House of Commons European Scrutiny Committee published its latest report on 7 February 2014

The report includes the Committee’s consideration, which took place at a meeting in January, of the European Commission’s proposals for the Payment Services Directive II (“PSD II”) and for a Regulation on interchange fees for card-based payment transactions.

This is the second time the Committee has considered these proposals. They were considered by the Committee in October 2013, after which the government was asked for more information about which improvements would be required in order to make the proposals fully acceptable.

What this means for you

The proposals remain under scrutiny  but the UK government has confirmed that it:

• wishes to ensure that PSD II does not impose unnecessary burdens on the UK financial services sector;
• requires consumers to be given maximum protection while ensuring that they can benefit fully from technological advancement in the payments market;
• requires the Commission to provide more evidence to support its proposed cap levels on interchange fees; and
• believes that the proposed legislation attempts to address the issue of increased risk to consumers of new payment methods by increasing the scope of PSD II to include digital payments and TPPS.

Once the further information requested by the Committee has been provided, the proposals will be reconsidered. We will report on any further considerations in future issues of Payment Matters.

Multilateral Interchange Fee Regulation could be bad for UK Acquirers

In the last issue of Payment Matters we reported on the latest draft Opinion on the MIF proposal by the European Parliament’s Committee on the Internal Market and Consumer Protection (IMCO).  Whilst no further guidance has been published in respect of the route the Commission is likely to take, Eversheds’ Partner Tim Buckingham and Senior Associate Hannah Nichols have had an article published in E-Finance & Payments Law & Policy, considering whether the current proposals could be bad business for UK acquirers.

What this means for you

The proposed delay in the introduction of domestic interchange fee caps some 12-24 months after the introduction of cross border caps could be disastrous for UK acquirers and arguably the only party that stands to benefit from IF regulation is large retailers.  To read the article in full, click here.