The Second Payment Services Directive (“PSD2”), which sets out the EU framework for regulating payment services, entered into force on 12 January 2016, but is not likely to be passed by the Bulgarian parliament until the end of January or early February 2018.
Save unforeseen developments, Bulgaria will miss the 13 January 2018 deadline for member states to transpose PSD2 into national law.
In Bulgaria, PSD2 is being implemented through the passage of an entirely new statute, the Act on the Payment Services and Payment Systems (the “Act”), which repeals and replaces the existing Payment Services and Payment Systems Act.
The Bulgarian Parliament approved the Act after its first hearing on 7 December 2017, and is currently conducting consultations ahead of a second hearing. The initial 14 December 2017 deadline for submitting proposals to the draft Act was extended to 24 January 2018.
With passage not expected until the end of the month, there is no official information on a precise date for PSD2’s implementation.
PSD2 will bring significant changes to existing regulations. The most important include:
- introducing new types of payment services;
- expanding the scope of payment services through the application of the Act;
- narrowing the exclusions of PSD1, including with respect to limited network exclusions;
- increasing the requirements for the licensing of payment and e-money institutions;
- establishing a new type of payment institution, the “account information service provider”;
- creating new procedures for monitoring risk, and for incident reporting mechanisms;
- defining the specific information payment institutions must provide to clients; and
- detailing precisely what sanctions exist under the Act, and how they are applied.
As soon as the Act is officially approved and published, we will provide a detailed analysis of its provisions. In the meantime, you may benefit from the European Banking Authority’s guidelines and recommendations, which can be found here.
Business will have a short deadline to comply with the provisions of the Act, so prompt action is recommended.