Scope of regulation and implementation
The Payment Account Directive ("PAD") sets out common standards that EU Member States must adhere to in order to improve the comparability of fees linked to payment accounts collected by PSPs, to facilitate switching of a payment account from one PSP to another, and to ensure access to a generally free-of-charge payment account with basic features. PAD regulates a certain part of the payment services market, as this directive was conceived as a regulation complementary to the Payment Services Directive (2007/64/EC), ("PSD") which established the general framework for payment services within the EU.
PAD should be implemented into national legislation by Member States by not later than September 2016. Poland started the implementation process in August 2015 but it is still in its beginning phase.
Firstly, PAD foresees free (or inexpensive, if the fee is reasonable) basic accounts for all consumers. It aims to ensure that all consumers legally residing in the EU have access to basic payment services, regardless of their financial situation or nationality, and thus aims to reduce financial and social exclusion.
To this end, Member States must implement provisions into legislation, committing credit institutions to offer their current and potential customers a fully functional payment account. The basic features of these accounts should comprise making deposits, withdrawing cash and allowing for payment transactions. In practice, the only requirements for consumers to obtain access to a basic account will be filing a request and not having any other payment account within the same country.
Comparability of fees
PAD provides that each PSP shall make a fee information document available to its potential customers to allow them to easily compare the offers of various service providers. This document should reflect fees for the most representative payment services (eg, maintenance of a payment account, transfers of funds, cash withdrawals). The layout of the document and order in which the fees will be presented should be specified by the national legislator.
Furthermore, PSPs will be committed to providing their customers with a free yearly statement of fees. Such document should describe all the fees actually collected over the past year with respect to the payment account (ie, it should cover, in particular, all fees connected with the maintenance of the account, transactions performed, interest accrued or charged). According to the EU legislator, the statement of fees will maximise the understanding of the information provided, and will allow consumers to evaluate the services in terms of pricing.
Switching of accounts
The EU legislator intends to facilitate the "transfer" of a payment account from one PSP to another.
Switching a payment account number will not be possible when transferring a payment account. Under PAD switching means the opening by the acquiring PSP of a new payment account, transferring all the funds kept in the old account, "transferring" to the new account all the services connected with the old account and, only in certain cases, redirecting incoming payments by the "old" PSP to the new account.
PAD envisages that all a consumer will have to do to switch its payment account will be to file a request with the relevant new (acquiring) PSP. After receiving such request, the new PSP will have to carry out and complete the whole process on behalf of a consumer.
Within its duties, the acquiring PSP will have to liaise directly with the "old" one in order to obtain, in particular, information about the consumer's standing orders, direct debit mandates, recurring incoming credit transfers and credit-driven direct debits relating to the old payment account.
Based on such information, the new PSP will have to set up standing orders and prepare to accept direct debits with respect to the new account. Furthermore, it will have to inform the payers making recurring incoming credit transfers into a consumer's "old" payment account about the details of the new payment account.
Objectives and anticipated results
As a result of the implementation of PAD, the payment services market may become more competitive. Upcoming implementation will force payment institutions to amend their business plans and adapt to the new conditions. However, the loss incurred as a result of the increased competition and free (or inexpensive) basic accounts most likely will be compensated by adjustment of fees for other services.