The Bundeskartellamt has ruled that the restrictions within the online banking guidelines of the German Banking Industry Committee (Deutsche Kreditwirtschaft) are illegal. The online banking conditions have been declared as violating both German and European competition law, as they inhibit competition between the various providers of payment services found on the internet.
For years, the German Banking Industry Committee and its affiliated associations (National Association of German Cooperative Banks, German Savings Bank Association and the Association of German Banks) have used the same General Terms and Conditions that have been decided by the members of the Committee, while their use is recommended by the banking associations to be used by their members.
These rules include “Special Conditions for Online Banking” that have been found by the Bundeskartellamt’s investigation to restrict the online banking customers’ ability to use non-bank payment services. The principal problem with the German Banking Industry Committee’s rules are that consumers are unable to use their PINs (personal identification numbers) and TANs (transactional authentication numbers) in non-bank payment systems, therefore prohibiting third party access. The authority declared that the wider use of PINs and TANs would not compromise the banking industry’s security in online banking and their current rules prevent the wider use of non-bank competitors.
These rules have significantly prevented the ability of consumers to use innovative and non-bank payment solutions instead of those that are provided by the banks themselves. The payment solutions have responded to the need to provide lower-priced and faster alternatives to pre-existing payment services that are already established in the market.
Despite declaring the online banking rules illegal, the Bundeskartellamt have limited their intervention to just the ruling and, at the request of the associations involved, have suspended the imposing of its declaration. This means that the relevant parties are not subjected to an immediate enforcement of the decision and tight deadlines, however their actions are clearly limited under competition law and therefore they must comply.
Rules for the providers of non-bank payment solutions are currently going through a process of European legislation reform. The European Payment Services Directive (PSD), incorporating the sector of online payments, was amended in 2015 and is due to be incorporated into national law in 2018. Its implementation will provide a standard legal framework as well as standard technical regulation standards on which to judge the performance of online payment solutions.