Payment Package: more benefits for consumers and retailers

Today, the European Parliament adopted the Payment Package which is targeted at cheaper fees for Europeans when paying by credit or debit card and at the standardisation of the rules for online transactions. The Package includes a revised Payments Services Directive (PSD2) and a Regulation on Multilateral Interchange Fees.

Pablo Zalba MEP, Vice-Chairman of the Committee on Economic and Monetary Affairs, said: “This Regulation is a major advance in the harmonisation of payment services which establishes a level playing field for this market in the European Union, promoting competitiveness and innovation". The new legislation will reinforce the Single Market, which is one of the main objectives of the Spanish MEP. "It represents a step forward in strengthening our Single Market, because it boosts a greater transparency that will benefit both consumers and retailers."

Every Member State has diverse and unclear laws regulating online and card payments which generates a fragmentation of the payments markets with an estimated a cost of €130 billion a year (more than 1% of EU GDP). The new legislation is aimed at establishing a level playing field which will contribute to the defragmentation of this market, leading to large benefits for both consumers and retailers.

The Multilateral Interchange Fees Regulation sets caps of 0.2% and 0.3% for debit and credit card transactions respectively. The aim is to reduce the fees that banks charge to retailers for payment services, which in the medium term will impact the final price for consumers. According to the European Commission, these fees represent a cost of €10 billion a year for EU traders.

The Payment Services Directive aims to facilitate and render more secure the use of low cost internet payment services. These service providers will now be subject to the same standards of regulation and supervision as all other payment institutions. At the same time, banks and all other payment service providers will be required to enhance the security of online transactions by including strong customer authentication for payments. The proposed Directive is also intended to give consumers increased protection against fraud and possible abuse.

Diogo Feio MEP added: "From today onwards, the online payments world will be under stricter European rules and supervision standards and never again can surcharging for the use of a specific payment method be used as an extra source of revenue, like we have seen in the past for the online sale of airline tickets". The Portuguese MEP also explained the consumer potential that this Directive will bring to SMEs: "E-commerce is booming, more and more we are seeing SMEs using online commerce to go beyond their national borders and by allowing them to have access to easy and secure methods of payment, as we have done today in PSD2, we are raising consumer potential by 503 million inhabitants, and this is only in the EU", he concluded.