On 2 February 2017, we blogged that HM Treasury published a consultation on implementing the revised Payment Services Directive (PSD2).
HM Treasury has now published its response to its consultation on implementing PSD2. The document summarises the questions submitted to the consultation and outlines the Government’s response.
Among other things, the document notes:
- in relation to PSD2 implementation, the Government considers it appropriate to maintain its proposed approach: copying-out the directive, while looking to take advantage of derogations and ensuring that the exemptions from the PSD1 carry across to the PSD2 where appropriate. This will help minimise the impacts on affected businesses, while ensuring that customers benefit from the protections and rights that the PSD2 puts in place. In response to concerns about the FCA needing more powers, the Government has examined the case for extending the FCA’s existing powers to make conduct rules for firms regulated under the Financial Services and Markets Act 2000 to firms regulated under the PSD2 and the E-Money Directive. The Government has concluded that there is merit in extending the FCA’s rule-making powers to enable the regulator to combat poor practice among firms regulated under these two directives, protecting consumers, and ensuring that all firms providing payment services can be held to the same standard;
- the Government has worked with the Bank of England (BoE) and the FCA on provisions that will enable non-bank payment service providers (PSPs) to effectively safeguard client funds in a settlement account with the BoE. The BoE will set out more detail on how non-bank PSPs can hold a settlement account in due course;
- the Government intends to maintain the thresholds for low-value payment instruments in the Payment System Regulations 2017 at: (i) domestic: €60 for a single transaction, €300 total spending limits and €500 total stored value limit; and (ii) cross-border: €30 for a single transaction, €150 total spending limit, and €250 total stored value limit;
- in relation to PSPs providing monthly statements to payers and payees, the Government intends to mandate that customers are provided with a monthly statement on a durable medium, thereby avoiding the default scenario of transaction-by-transaction notifications. The Government also recognises that this may not be how individuals wish to receive information on their payment transactions, and therefore intends to allow PSPs to include in their framework contracts a clause which enables consumers to choose whether they wish to change how they receive their statement. Customers will have the choice over whether they wish to have the statement actively provided or just made available on request, whether they wish to receive it in an alternative manner which allows the information to be stored and reproduced, and whether they wish to receive it more frequently than monthly;
- the Government intends to continue to limit access to the Financial Ombudsman Service (FOS) to those complainants who would usually be eligible to refer a complaint to the FOS, including those consumers who use a registered Account Information Service Provider;
- the Government confirms that, from 13 January 2018, Account Information Services Providers (ASPSPs) will have to allow access to payment accounts for all registered or authorised third party providers (TPP), unless they have an objective reason to deny access. The FCA also sets out further detail on blocking TPPS for fraud in their draft approach document, ASPSPs will not have to provide access to unregulated or unauthorised TPPs; and
- with regard to the proposed approach to consent, authentication and communication, the Government intends to maintain its proposed approach for ASPSPs and Payment Initiation Services. The FCA’s draft approach document sets out further detail on the withdrawal of consent. The final European Banking Authority regulatory technical standards will set out the approach to renewal of consent, with the current draft suggesting that this should be left to individual PSPs to decide upon.
Alongside this document HM Treasury and the FCA have co-published a supplementary document setting out their expectations for the third party access provisions in PSD2.
The statutory instrument that transposes the PSD2 (the Payment Services Regulations 2017) has also been laid before Parliament.
The FCA and the Payment Systems Regulator have finished consulting on the necessary changes they need to make to their rules and guidance to implement the PSD2, and they will publish their final documents in Q3 2017.
View The Payment Services Regulations 2017, 19 July 2017