The revised Payment Service Directive (PSD2) includes a requirement for providers of payment initiation services and account information services to hold professional indemnity insurance (PII) or a comparable guarantee against specified liabilities as a condition for their authorisation or registration.

In line with its obligations under PSD2, on 22 September 2016, the European Banking Authority (EBA) issued a consultation on its draft guidelines on the criteria which competent authorities should consider when stipulating the minimum monetary amount of PII or comparable guarantee to be held by such providers.

In addition to the criteria to be considered, the consultation paper sets out the EBA’s proposal to use a formula for the calculation of the minimum monetary amount of the PII or comparable guarantee, explains when and how the lowest tier should be used, provides details on indicators for the criteria set out in PSD2 and explains the calculation method proposed for some of the indicators.

What this means for you

The EBA invites comments on all the proposals set out in the consultation paper. The consultation will remain open until 30 November 2016. The final Guidelines will be published after consultation. This will be relevant for credit institutions as well as payment institutions given their increased interaction with providers offering the new types of regulated payment services under the new PSD2 regime.

European Banking Authority holds public hearing for PSD2 Consultation paper

As part of the European Banking Authority’s (EBA) draft regulatory technical standards on strong customer authentication and secure communications under the PSD2 consultation paper, a public hearing was held on 23 September 2016. The hearing took place at the EBA’s London office where Dirk Haubrich and Geoffroy Goffinet of the EBA delivered a presentation to attendees.

As part of the consultation process, the purpose of the public hearing was to provide a summary of the consultation paper and re-iterate the questions within. The attendees were also offered the opportunity to gather additional explanations and further clarifications from the EBA in order to assist them with their responses to the consultation paper. The hearing was not an opportunity for attendees to provide feedback, rather the EBA encouraged attendees to formalise their responses to the consultation in writing.

What this means for you

The Consultation period remains open until 12 October 2016. Following this:

  • The EBA will assess the responses to the consultation paper, make changes where appropriate, and plans to publish the final draft regulatory technical standards in early 2017;   
  • The EU Commission will then carry out a legal review before it is adopted, for which the EU Council and EU Parliament will hold scrutiny rights; and   
  • The EBA have advised that given the relevant timelines of the implementation procedure, the application date of the regulatory technical standards will be in October 2018 at the earliest.

ECB website updates

The European Central Bank (ECB) has updated its website to provide more information about instant payments. Pan-European instant payments will be launched across Europe in November 2017, which will dramatically increase the speed at which payments are made and received in Euros throughout the European Union.

What this means for you

More information is now available on the introduction of the instant payments scheme, including:

  • The instant payments page summarises the nature of instant payments and how they will benefit consumers, businesses, governments and payment service providers;   
  • The Tell Me More page outlines the changes that will take place after the launch of instant payments and the ECB’s role in preparing for its launch; and   
  • A further page provides information on future market infrastructure, including the full programme of Sibos 2016, which began on 26 September 2016 with the Eurosystem’s community session entitled "The future at your fingertips – the European market infrastructure of tomorrow."

CPMI establishes wholesale payments security taskforce

The Committee on Payments and Market Infrastructures (CPMI), which promotes the safety and efficiency of payment, clearing and settlement services, announced on 16 September 2016 that it has established a security taskforce.

What this means for you

The taskforce has a broad remit to look at the security of wholesale payments involving banks, financial market infrastructures and other financial institutions.  Cyber fraud is a significant concern to the financial services sector and the creation of the taskforce builds on previous work undertaken by the CPMI on cyber security and operational risk.

According to CPMI Chairman, Benoît Cœuré, the “first phase of this work is seeking to review current practices in this area and based on this input, the CPMI will decide how to proceed.  It is premature to speculate what will result from this work”.

Launch of new European Cards Stakeholders Group

The European Cards Stakeholders Group (ECSG) was launched on 14 September 2016.  The ECSG is picking up the work of the Cards Stakeholders Group which has now reached maturity and the new multi-stakeholder group will focus on the promotion of card harmonisation in the Single Euro Payments Area. 

Representation within the ECSG covers the 5 main industry sectors: retailers/wholesale; vendors (cards, payment devices, related IT systems); processors of card transactions; card schemes and the payments service providers (represented by the European Payments Council).  The ESCG is comprised of 32 organisations, with 4 observers including the European Commission and the European Central Bank.

What this means for you

As part of its promotion of card harmonization, the ESCG will maintain, develop and promote conformance with the SEPA Cards Standarisation Volume (the Volume), a key document for the card industry which defines guidelines for card standardisation, interoperability and security in Europe.

Version 8 of the Volume is currently being prepared for its release and will be the first to be published by the ECSG.