HM Treasury issued a policy statement on 18 September 2016 outlining how the UK has met its responsibilities under the Payment Accounts Directive.

The Payment Accounts Directive was adopted in July 2014 and in accordance with the implementation deadline, the provisions of the Payment Account Regulations 2015 (PARs) on packaged accounts, switching and basic bask accounts came into force on 18 September 2016.

What this means for you

In accordance with the PARs, credit institutions must not discriminate against consumers legally resident in the European Union by reason of their nationality or place of residence or by reason of any other ground referred to in Article 21 of the Charter of Fundamental Rights of the European Union when those consumers apply for or access a payment account.

In addition, all payment service providers are now required to offer customers a switching service between payment accounts that are denominated in the same currency and opened or held with a payment service provider located in the UK. Alternatively, payment service providers may choose to offer the Current Account Switching Service which has been designated by the Payment Systems Regulator as an alternative arrangement under the PARs.

Barclays, Clydesdale and Yorkshire Bank, Co-operative Bank, HSBC, Lloyds Banking Group (including Halifax and Bank of Scotland brands), Nationwide, Royal Bank of Scotland (including NatWest and Ulster Bank brands), Santander and TSB are designated credit institutions under the PARs and as such must now offer a payment account with basic features to any consumer who meets the relevant eligibility criteria who applies for a payment account with basic features on or after 18 September 2016.

The remaining provisions of the PARs which relate to transparency and comparability of fee information for payment accounts used for everyday transactions will not come into force until the European Commission has adopted the draft regulatory technical standards submitted by the European Banking Authority.

The Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) are appointed as competent authorities under the PARs. The FCA is responsible for monitoring and enforcing the requirements of the PARs whilst the PSR is responsible for designating and monitoring alternative switching schemes.

The Money Advice Service (MAS) has a duty to raise awareness about basic bank accounts. Once the European Commission has concluded its work relating to transparency of fee information, MAS will also be required to provide consumers with free of charge access to a website enabling them to compare fees charged by payment service providers for services most commonly associated with payment accounts.