PSD II follows on from the original Payment Services Directive (PSD), which was adopted by the EU in 2007. This legislation established an EU single market for payments to encourage the creation of safer, more innovative payment services.
Bill 89 of 2019 transposes into Maltese law the follow Directives:
- Payment Services Directive II (Directive 2015/2366/EU) – known as PSD2;
- Payment Accounts Directive (Directive 2014/92/EU); and
- Bank Recovery and Resolution Directive (Directive 2014/59/EU).
Bill 89 of 2019, implementing PSD II, will introduce and regulate inter alia third-party payment service providers (TPPs), namely:
- Payment Initiation Services Providers – PISP: that offer a service to initiate a payment order at the request of the payment service user with respect to a payment account held at another payment service provider;
- Account Information Service Providers – AISP: that offer an online service to provide consolidated information on one or more payment accounts held by the payment service user with either another payment service provider or with more than one payment service provider.
Significant amendments emerging from the Directive include:
- Third-Party Providers (AISPs will provide online information on the accounts held by the payment service user with other or multiple payment service providers, while PISPs will see payment service users being able to initiate a payment order related to a payment account held with another payment service provider)
- Improved Security (Stronger customer authentication for banks and credit institutions; which will see European banks updating their card technology for improved security)
- Bank Charges (Transfers between banks located in EEA countries will see the sharing of charges between payer and payee, irrespective of the currency of the transfer and will not be able to impose additional fees to those opting to pay with electronic instruments).
PSD II will see greater standards for consumer protection and bank transparency being implemented across the EU.
About the Author
The article has been authored by Dr Ursula Farrugia, Advocate at CSB Legal, who specialises in Company Law, Financial Services, Compliance & AML and the Fintech Industry.