EU Lawmakers Reach Informal PSD2 Agreement (May 7, 2015)
European lawmakers, following years of discussion, believe improved competition, more innovation and enhanced consumer protections in cross-border payments will be the result of an informal agreement on a revised Payment Services Directive (PSD2) reached this week.
Members of parliament’s economic and monetary affairs committee said the agreement will expand consumer choice by ensuring that consumers using an online account would have the right to use payment software or devices provided by an authorized third party and to have transactions executed on their behalf by this provider, according to reports. The deal also prevents banks from freezing out new entrants by requiring them to give third parties access to a payer’s account unless the bank has justified security reasons and has reported the evidence to authorities.
The informal agreement also seeks to pass mandates that payment service providers adopt authentication technologies, transmit personal data through secure channels and share information only with consumers’ consent.
Although the informal deal has been struck by the European Commission, members of the European Parliament (MEPs) and Council of Ministers, any formal agreement must be voted on by MEPs and then endorsed by member states.
“The EU payment services market remains fragmented and expensive, costing €130 billion (US$146.5 billion), or over 1 percent of EU GDP, a year,” said lead MEP Antonio Tajani. “The new regulatory framework will reduce costs, improve the security of payments and facilitate the emergence of new players and innovative new mobile and Internet payment methods.”
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