Payment Matters 20: Europe and beyond

• Europe
• Global

• Financial services - Payment services

30-11-2015

In this issue:

• World Bank and CPMI consult on payment aspects of financial inclusion
• Cross-border payments to be made easier under the SEPA Regulation
• European Parliament adopts PSD2

World Bank and CPMI consult on payment aspects of financial inclusion

In September 2015, the World Bank and the Committee on Payments and Market Infrastructures (CPMI) issued a consultative report on payment-related aspects of financial inclusion. The report examines demand and supply-side factors affecting financial inclusion in the context of payment systems and services, and suggests measures to address these issues.

The objectives of the consultation include enabling individuals and small businesses – which are more likely to (i) lack some of the basic financial services or (ii) be financially excluded when compared to larger businesses – to have access to and use at least one transaction account operated by a regulated payment service provider to perform most, if not all, of their payment needs; to safely store some value; and to serve as a gateway to other financial services.

What this means for you

The report looks to put more focus on international financial inclusion from a payments perspective, particularly in relation to transaction accounts. It contains quite a lot of analysis of approaches being taken in various jurisdictions to encourage financial inclusion, including in respect of basic bank accounts and e-money but they are keen to hear from interested parties before the document is turned into its final form. If you wish to contribute, comments are invited by 7 December 2015.

Cross-border payments to be made easier under the SEPA Regulation

The date for simpler cross border payments will soon be here as from 1 February 2016, payment services providers will require less information when processing such transactions. Article 5(7) of the Single Euro Payments Regulation states that "after 1 February 2016 for cross-border payment transactions, Payment Services Providers shall not require Payment Service Users to indicate the BIC of the PSP of a payer or of the PSP of a payee".

What this means for you

What this means in practice is that from 1 February 2016 making a cross border payment will be easier as customers will just need to provide their International Bank Account Number. UK customers are currently also required to give their Bank Identifier Code to help the bank identify an account when making SEPA transactions. This will bring the UK in line with the Eurozone countries that use this internationally recognised standard format. It will also increase efficiency and reduce the likelihood of payment errors, as more payments will be able to be made without the need for manual intervention through the use of Straight Through Processing.

European Parliament adopts PSD2

On 8 October 2015, the European Parliament adopted the revised Directive on Payment Services (PSD2). On 16 November 2015, the Council of the EU published a press release announcing that it has adopted PSD2. The press release suggests that the Council has adopted the text of PSD2 that it published in October 2015. The text should shortly be published in the Official Journal of the EU. From that date, Member States will have two years to introduce the necessary changes in their national laws in order to comply with the new rules.

What this means for you

In the spotlight section of Payment Matters 18, we provided a summary of PSD2. We have now finally arrived at a final form of text. From here, payment service providers should:

• make sure that they feed in to the various consultations which will take place on the subject matter from both the EBA and home state regulators
• begin to analyse potential impact on terms and conditions and operational processes and systems