A draft Bill on the Payment Services Market (implementing PSD2) was published in 22 December 2017 by the Spanish Ministry of Treasury. After a public hearing period which lasted until 16 January 2018, the Bill will now go to both chambers of Spanish Parliament (Congreso and Senado) for a final approval expected to happen during the first half of this year 2018.
A firm step towards implementation
By publishing this draft Bill Spain takes a firm step to implement PSD2 and will join the club of European jurisdictions – such as the UK or France – which have already finalised implementing regulations.
Once finally approved, this draft Bill will set out relevant changes within the payment services sector.
The new Act is going to enable banks and other registered digital entities to access the banking data of any physical or legal person that may authorise it in real time.
This way, the services that may have already existed but that have been in a legal limbo until now will be regulated.
Such is, for example, the case of mobile phone apps that unite all accounts or those that enable direct payment to any certain commerce, without the intervention of banks or any credit entities.
Strenghtened consumer protection
Consumer protection will be strengthened, and virtual security and authentication levels will be reinforced.
An example of how consumer protection will increase is in the event of credit card theft or unknown/unauthorised payments, as the client will be responsible for bearing the cost of only the first €50, as opposed to the €150-boundary that had been set out until now.
In addition, the deadline to resolve claims will also be reduced from two months to 15 days.
In this sense, the consumer will be able to claim from the bank, the aggregator, or even both, which broadens the chances for clients to be duly compensated.
Moreover, the government has decided to widen the transparency and consumer protection obligations to micro-entities of less than 10 workers or generating an annual turnover under €2 million (which was of optional regulation according to PSD2).
A new regime for operators
The draft Bill also contemplates the creation of a regime for new operators, directed both towards the payment initiators and the account information service providers, which had not been regulated until now.
The former would function as intermediaries, in carrying out wiring orders on behalf of clients (with previous consent to access the clients' account details), either between consumers or in their operations with enterprises, and they would compete with directly with traditional credit card companies and banks; while the latter would act as aggregators of these products, providing added value to the management of clients' accounts.
As set out by the draft Bill itself, regulating payment initiators will provide consumers with low-cost solutions to perform payments, enabling them to buy online even if they do not have credit cards, and without undue delay.
On the other hand, the regulation of account information service providers will enable payment service users to gather a global and immediate view of their financial situation at any given time and place.
In regulating these new operators, the draft Bill includes a new chapter in which it regulates the operative and security risks of payment entities.
Access to banks trading infrastructure
These operators will have the right to access the banks' trading infrastructure, conditioned to the prior obtaining of a license to act either as payment initiators or as account information service providers.
The draft Bill simplifies the process of authorisation to these operators, depending on their size and of whether or not they have an EU passport, which will allow FinTechs to enter the market in a relatively simple way.
In this sense, the Bank of Spain, which will, from now on, be in charge of granting authorisations of payment entities (for the purposes of ensuring quicker and more effective processes) has established that those entities with annual turnover below €36 million or a monthly turnover below €3 million, will be subjected to less conditions in terms of registering.
Bank of Spain notification
Before the publication of the draft Bill, the payment service providers that considered they were exempted from the application of the former Spanish Payment Services Act 16/2009 would assume such exemptions without a previous consult to the authorities. The draft Bill at hand now obliges for payment service providers to notify the Bank of Spain of any services they may provide, so that it may evaluate whether or not such provider is exempted from applying the payment service provision regulations.
What happens now?
Though the final Act implementing PSD2 is expected to be passed by the Spanish Parliament during the first half of 2018, the entry into force of the Act will occur three months after its publication in the Official State Gazette.
Notwithstanding the above, it should be borne in mind that the security measures foreseen by PSD2, among which is the requirement of reinforced authentication, will not enter into force, at least, until the second half of 2019, since both the PSD2 and the draft Bill foresee in this sense a period of 18 months from the date of entry into force of the regulatory technical standards published by the European Banking Authority.
The draft Bill also establishes a transitory regime for payment institutions, for services for the initiation of payments or for information on accounts and for electronic money entities that already have authorisation, and which is regulated in a similar way to that established for in PSD2.
On Thursday 1 March at 12pm GMT, join us and PaymentsCompliance at a live webinar to hear how payments experts can thrive in the post-PSD2 era. Our panel will discuss the impact of the Directive, what issues have emerged and the opportunities ahead.
Receive free news and analysis – written by Hogan Lovells' world-leading legal teams and tailored to your preferences – by registering on Engage. You can also access our cutting-edge interactive Lawtech tools, designed to help you make better decisions and save time and money.
You can also keep track of all the Engage content by following our LinkedIn page.