Legislative background
Can PayPal and instant transfer be considered payment instruments?
The German Supreme Court recently held that a payer and a payee may validly agree that a charge may be levied by the payee for the use of PayPal or instant transfer service. This article considers whether this decision could also allow for charges to be levied by Austrian payees.
Unlike in Germany, the Austrian government uses the option pursuant to article 62(5) of the EU Payment Services Directive 2 (PSD 2) (2015/2366). Accordingly, pursuant to the last sentence of section 56(3) of the Payment Services Act 2018 (ZaDiG 2018),(1) the payee is not permitted to charge fees for the use of a specific payment instrument.
The Supreme Court has already dealt with section 56(3) (formerly section 27(6)) of the ZaDig 2018 where violations of this provision have been identified.(2) The Supreme Court has held that this provision enables market transparency. Further, this provision generally prohibits the levying of surcharges. The purpose is to prevent a company from levying a higher price than the one notified on the customer for the use of a certain payment instrument. In fact, consumers make their purchasing decisions by comparing price offers and not the charges for using specified payment instruments. However, the charges in these cases were related to payments via credit card, order form or telebanking and not via PayPal or instant transfer.
Can PayPal and instant transfer be considered payment instruments?
Considering the broad definition of "payment instrument" in the ZaDiG 2018 (implementing PSD 2) and the fact that instant transfer is based on a credit transfer, which is used by the payer (more precisely, on behalf of the payer by the third party) to initiate a payment order, there are good grounds to qualify instant transfer as a payment instrument.
However, payment via PayPal involves only the transfer of electronic money from the payer to the payee. Although a mere electronic money payment does not result in a credit transfer pursuant to the EU Single Euro Payments Area Regulation (260/2012), this payment still represents a set of procedures agreed between the user and the payment service provider (ie, PayPal), which is used by the user to initiate a payment order. Accordingly, PayPal also qualifies as payment instrument.
As instant transfer and PayPal are payment instruments in their entirety from which third-party payment service cannot be separated, a payee levying fees for the use of instant transfer or PayPal violates section 56(3) of the ZaDiG 2018.
However, while the payee is prohibited from levying fees for the use of certain payment instruments, the payee is allowed to offer a discount to the payer or to provide it with another kind of incentive for using a certain payment instrument (first sentence of section 56(3) of the ZaDiG 2018). It may be argued that a payee may include charges of payment instruments in the total price of its service. The payee may then validly offer the payer a reduction from this total price for the use of certain payment instruments.
As such, strictly following the words of the law, there would be no unlawful levying of fees, but a reversed mode of charging fees. However, the Supreme Court – applying an economic view – has held that the prohibition of levying charges as provided for by section 27(6) of the former Payment Services Act is circumvented if the price is first increased by charges in order to be able to make pro forma discounts from the offered price.(3) As such, it is highly likely the Supreme Court will also dismiss an approach such as the one outlined above as violating the purpose of section 56(3) of the ZaDiG 2018.
For further information on this topic please contact Stephan Schmalzl or Evelyne Schober at Schima Mayer Starlinger by telephone (+43 1 383 60) or email ([email protected] or [email protected]). The Schima Mayer Starlinger website can be accessed at www.sms.law.
Endnotes
(1) BGBl I 17/2018 as amended.
- 4 Ob 169/17g (22 March 2018);
- 4 Ob 153/20h (22 December 2020);
- 10 Ob 27/14i (17 June 2014);
- 9 Ob 33/14i (25 June 2014);
- 1 Ob 81/14i (24 June 2014); and
- 10 Ob 31/11y (8 November 2011).