The Payment Accounts Directive (PAD) aims to improve transparency and comparability of fee information on payment accounts for consumers so that they can shop around and switch providers more easily. To that end, it seeks to standardise the most relevant terminology at member state level and at Union level and it provides for the creation of templates for the presentation of certain fee information to be used by payment service providers.
In line with its obligations under PAD, the European Banking Authority (EBA) has developed in parallel, and on 22 September 2016 launched a consultation in respect of, the following draft technical standards:
- draft Regulatory Technical Standards setting out the Union standardised terminology for those services that are common to at least a majority of member states;
- draft Implementing Technical Standards on the standardised presentation format of the fee information document (FID) and its common symbol; and
- draft Implementing Technical Standards on the standardised presentation format of the statement of fees (SoF) and its common symbol.
What this means for you
The EBA invites comments on all the proposals set out in the consultation paper. The EBA is planning to hold a public hearing on 21 November 2016 and the consultation period ends on 22 December 2016.
Following the adoption of the draft regulatory technical standards by the European Commission, payment service providers will be required to use the proposed standardised terminology in the two disclosure documents to be issued to consumers namely:
- the FID which must be provided to consumers in good time before entering into a contract for a payment account; and
- the SoF which must be provided to consumers free of charge at least annually after entering into a contract for a payment account.
The FID must contain the standardised terms in the final list of the most representative services linked to a payment account and, where such services are offered by a payment service provider, the corresponding fees for each service. The purpose of the FID is to enable consumers to compare easily the offerings of different providers and to choose the option that best reflects their needs and uses of the accounts.
The SoF will provide the consumer with a statement of all fees incurred in order to provide the consumer with a general overview of all fees paid during the year to assist consumers in understanding what the fees relate to and to assess whether they should change their consumption patterns or move to another provider.