Implementing the Community Lisbon programme - Proposal for a Directive of the European Parliament and of the Council on payment services in the internal market and amending Directives 97/7/EC, 2000/12/EC and 2002/65/EC {SEC(2005) 1535}
Date: 2005-12-01
Institutions: European Commission
Subjects: approximation of laws, free movement of capital, free movement of goods, free movement of persons, freedom to provide services, payment, services contract, single market

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 1.12.2005 
COM(2005) 603 final 

2005/0245 (COD) 

Implementing the Community Lisbon programme: 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on payment services in the internal market 

and amending Directives 97/7/EC, 2000/12/EC and 2002/65/EC 

(presented by the Commission) 

{SEC(2005) 1535} 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

Modern  economies  are  based  on  efficient  and  secure  payment  systems.  Payment 
systems  facilitate  the  purchase  of  goods  and  services  and  provide  for  231 billion 
transactions  (cash  and  non-cash)  per  year  in  the  Community  with  a  total  value  of 
EUR 52 trillion.  However, 
the  current  payment  system  has  high  cost.  The 
Commission's  objective  is  to  create  a  Single  Payment  Market  where  improved 
economies  of  scale  and  competition  would  help  to  reduce  the  cost  of  the  payment 
system. Based on Articles 47(2) and 95(1) of the EC Treaty the Commission's proposal 
will establish a common framework for the Community payments market creating the 
conditions  for  integration  and  rationalisation  of  national  payment  systems.  This  is 
complemented by industry's initiative for a Single Euro Payment Area (SEPA), aimed 
at integrating national payment infrastructures and payment products for the euro-zone. 

A  modern  and  technology  based  economy  needs  an  efficient  and  modern  payment 
system. This will have a direct and positive impact on competitiveness of the financial 
sector and will improve the competitiveness of the economy as a whole.  

The  Commissions'  initiative  will  focus  on  electronic  payments  as  an  alternative  to 
expensive  cash.  Modern  electronic  payments  are  recognised  to  stimulate  consumer 
spending  and  economic  growth1.  Best  practice  shows  that  modernisation  of  payment 
systems and increased use of the most cost-effective services can half the average cost 
of producing payments over a period shorter than ten years. If, for example, the use of 
cash  would  be  reduced  to  the  level  of  countries  with  the  lowest  usage,  this  would 
generate a surplus of EUR 5.3 billion2. 

Throughout Europe, there is room for further product standardization and consolidation 
of  payment  services.  Based  on  a  harmonised  legal  framework  it  will  be  possible  for 
providers  to  rationalise  payment  infrastructures  and  services  and  for  users  to  enjoy 
increased  choice  and  a  high  level  of  protection.  The  overall  results  will  be  greater 
economies  of  scale  and  improve  efficiency  of  payment  systems  in  the  European 
Community. For example if unit cost levels were to decrease to 20 percent above the 
best  practice  level  in  the  EU,  this  would  generate  EUR 10 billion  additional  ssavings 
overall.  Standardisation  of  technical  and  legal  requirements  of  payments  will  allow 
banks  to  offer  faster  and  more  economic  end-to-end  automatable  payments  and 
facilitate invoicing for businesses. As a consequence businesses would have access to 
quicker and more reliable settlement and improved cash flow. This is crucial for cross-
border  trade  and  essential  for  reaping  savings  from  automation  -  businesses  report 
potential gains of up to EUR 50–100 billion a year.  

Opening up national payment markets for new providers and ensuring a level-playing 

1 

2 

Studies (e.g. VISA International and the Commonwealth Business Council, 2004) claim that for every 
ten per cent increase in the share of electronic payments in an economy, consumption is stimulated by 
as much as half a percent. 
Estimates of savings are based on a McKinsey study, 2005.  

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field  will  increase  competition  and  foster  cross-border  provision  of  services. 
Consumers of financial services will benefit from increased competition, transparency 
and  choice  in  the  payment  services  market.  This  should  foster  price  convergence 
between  Member  States  and  reduce  the  current  price  range  of  a  factor  1:83.  If  price 
levels in the most expensive countries, for example, were to fall to the current average 
this would create enormous savings and a seamless payment experience for consumers 
and  businesses  e.g.  Italian  and  Spanish  users  would  see  savings  of  respectively 
EUR 5.4 billion  and  EUR 1.3 billion.  Or  alternatively,  merchants  report  if  they  were 
able  to  buy  services  from  the  most  competitive  providers  in  the  EU,  they  would  in 
some cases pay up to 20 times less for card payments. 

For  realising  the  full  potential  of  the  Single  Payment  Market,  industry  has  to  play  a 
pivotal role. It is the payment service providers, which will be faced with the challenge 
to find the best way to integrate national fragmented payment infrastructures, in order 
to  benefit  from  the  potential  savings  and  offer  new  technologically  advanced  and 
efficient  payment  services.  Similarly  businesses  will  have  to  take  steps  to  ready 
themselves  to  interact  with  these  new  payment  systems.  This  will  require  significant 
investments from providers and businesses.  

However, payments industry has committed itself in the SEPA program to make these 
investments  and  to  complete  SEPA  by 2010.  The  substantial  benefits  are  considered 
worth  the  initial  investment  costs.  The  Commission's  proposal  will  facilitate  these 
investments and industry's work on SEPA. 

•  General context 

The current state of the payments system is unsatisfactory and the full potential of the 
Internal  Market  remains  unexploited.  The  rules  on  infrastructure  for  payments  in  the 
Community are national, not yet adapted to fit the Single Market. They are not geared 
to  handle  cross-border  payments  as  efficiently  as  national  ones  and  do  not  compete 
with each other. The few existing cross-border payment systems suffer from a lack of 
critical mass (only 3 % of payments) and operate with much higher costs per unit than 
national systems. The consequence of this is, that: 

–  The  current  payment  system  is  too  expensive.  Studies4  show  that  the  current 
fragmented  nationally  based  payment  systems  cost  around  2–3 %  of  GDP.  Banks 
themselves bear a large slice of this cost. At present banks are spending a third of 
their operating costs on payments. But in the end the whole economy and all users 
of  financial  services  bear  the  cost  of  an  inefficient  and  uncompetitive  payment 
system. 

–  Consumers are complaining about the effect of fragmentation on them. They have 
limited access to products that function EU-wide (e.g. efficient direct debits are not 
available  on  a  cross-border  basis).  But  worse  they  do  not  have  access  to  those 
providers  form  other  EC  countries  which  might  provide  them  with  a  cheaper  and 
swifter service.  

3 
4 

CapGemini, 2005. 
McKinsey,  2005  and  others  e.g.  Van  Hove,  De  Grauwe,  T.  ten  Raa,  EPC,  Dutch  National  Bank, 
Sveriges Riskbank. 

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–  The lack of competition in the market is hurting retailers. In some Member States, 
where  payment  service  providers  may  exercise  a  de  facto  monopoly,  retailers  are 
charged  up  to  5 %  of  their  total  card  sales.  The  Commission’s  anti-trust  authority 
and  national  authorities  are  already  investigating  the  market  for  debit  and  credit 
cards in the EU.  

–  Corporates  also  suffer  from  this  fragmentation.  They  are  unable  to  integrate  their 

invoicing with their payments. 

•  Existing provisions in the area of the proposal 

Progress  on  harmonizing  the  legal  framework  for  payments  is  rather  limited.  The 
European Community has adopted three legal acts: 

Recommendation (97/489/EC) providing for the protection of customers using 

o 
electronic payment verification instruments, such as payment cards.  

Directive  (97/5/EC)  facilitating  cross-border  credit  transfers  in  establishing 

o 
common customers' protection requirements; 

Regulation (2560/2001) on cross-border payments eliminated the difference of 

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price between cross-border and national payments.  

Although  Community  legislation,  in  particular  the  Regulation  on  cross-border 
payments,  has  made  it  easier  and  cheaper  for  customers  to  perform  many  types  of 
payments in euro within the Internal Market and has 'kick-started' industries' initiative 
for  a  Single  Euro  Payment  Area  (SEPA)  it  did  not  go  far  enough  to  achieve  a  true 
Single Market.  

•  Consistency with other policies and objectives of the Community 

The creation of the Single Market in 1992 and the introduction of the euro in 1999 laid 
the foundation for integration of EC financial markets. The initiative for an integrated 
and efficient EC payments market is one of the key actions of the Community Lisbon 
programme5 and makes an essential contribution to the Lisbon partnership for growth 
and employment6, and is in line with recent EC financial market policy objectives (e.g. 
Financial  Services  Action  Plan).  The  proposed  new  legal  framework  for  the  EC 
payments  market  will  also  benefit  from  the  Commission’s  efforts  to  increase 
competition through the application of competition policy. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Consultation methods, main sectors targeted and general profile of respondents 

The  Commission  has  consulted  stakeholders,  through  two  permanent  expert  groups7, 

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COM (2005) 330 and SEC (2005) 981 of 20.7.2005. 
COM (2005) 24 of 2.2.2005. 
Payment System Government Expert Group and Payment System Market Group. 

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numerous  bilateral  meetings  and  several  rounds  of  consultations  on  the  complex  and 
technical  matters  of  this  Directive.  The  Commission  has  benefited  significantly  from 
the input given by stakeholders and interested parties. The sectors consulted cover the 
EU-25  and  are:  payments  industry  (banks,  e-money  and  mobile  payment  providers, 
money  remitters  infrastructure  providers,  payment  cards  organisations,  etc.),  retail 
associations (Eurocommerce), industry general, corporate treasurers (EACT, TWIST), 
SME-organisation,  national  and  European  consumer  associations  (BEUC,  FIN-USE), 
payments experts, consulting firms, etc. 

From  2000–2002  the  Commission  prepared8  a  Communication  and  two  working 
documents9 and seven surveys for a public consultation on a possible legal framework 
for payments and to assess the current state of the market in Member States. In 2003 
the  Commission  prepared  a  Communication10  for  wide  public  consultation  on  the 
possible scope and content of a new legal framework. The final proposal was prepared 
in  2004–2005  in  intensive  collaboration  with  the  two  permanent  expert  groups  and 
consultation  with  stakeholders  and  based  on  six  working  documents  containing  the 
possible draft provisions and impact assessment.  

Summary of responses and how they have been taken into account 

Summarising the results of the Commission's consultations, all respondents saw a need 
for legal measures to achieve a Single Payment Market. Views varied, however, on the 
scope  and  degree  of  the  legal  measures  required.  All  respondents  considered  the 
objectives  of  rationalisation  and  consolidation  of  existing  Community  instruments  to 
be  desirable.  A  future  legal  framework  should  update  and  draw  together  the  various 
pieces of Community law and harmonise relevant national legislation in one coherent 
legal instrument.  

Three  open  consultations11  were  conducted  over  the  internet  on  31.1.2000,  on 
14.5.2002 
available  on 
http://europa.eu.int/comm/internal_market/payments/framework/index_en.htm. 

to 15.2.2004.The 

from 2.12.2003 

results 

and 

are 

•  Collection and use of expertise 

The  Commission  made  wide  use  of  external  expertise  during  the  preparation  of  this 
proposal.  Public  consultation  and  input  of  two  expert  groups  provided  valuable 
expertise. 

•  Impact assessment 

In order to achieve the stated objectives of the new legal framework for payments due 
consideration  was  given  to  the  type  of  policy  intervention  (no  action  vs.  regulatory 
approach  vs.  combination  of  regulation  and  market  self-regulation)  and  the  type  of 
legal instrument (Regulation vs. Directive) in the impact assessment. The Commission 

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9 
10 
11 

Most of the documents have been made publicly available on   
http://europa.eu.int/comm/internal_market/payments/. 
MARKT/208/2001 and MARKT/4007/2002. 
COM (2003) 718 final. 
COM (2000) 36 final,  public  working  document  on 
COM (2003) 718 final. 

a  new 

legal 

framework 

(2002), 

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considered the following alternatives in the chosen scope of this Directive: 

Objective 1:  Enhance  competition  between  national  markets  and  ensure  a  level-
playing-field.  

Alternative 1.  Keep status quo of nationally fragmented market access requirements 

Alternative 2.  Harmonisation of market access requirements for non-credit institution 
payment  service  providers  and  introduction  of  a  specific  license  for  payment 
institutions 

An  assessment  of  the  potential  social  and  economic  impacts  of  differentiated  market 
access  conditions  between  Member  States  confirmed  that  the  current  situation  is 
detrimental to the functioning of the Single Market and creates substantial barriers to 
market entry. Fragmented market access requirements distort competition and lead to 
higher  prices  for  users  and  high  profits  for  dominating  providers  in  national  markets 
and lower levels of innovation.  

The Commission carried out a risk assessment for the business activities of non-credit 
institution providers and found that the associated risks are hugely different from those 
of  credit  institutions.  No  empirical  evidence  of  problems  in  the  sector  or  events  of 
bankruptcy were found which would warrant similar requirements as for the business 
of  credit  institutions.  Particular  protection  objectives  are  not  present:  no  depositor 
protection,  no  systemic  importance  of  the  systems  concerned  and  no  threat  to  the 
integrity  and  stability  of  the  financial  system.  A  well  balanced  set  of  qualitative 
prudential requirements seems to best respond to the operational and limited financial 
risks  payment  institutions  face  in  the  course  of  their  business.  Quantitative 
requirements (such as capital requirements) are considered disproportionate to the risk 
and would potentially overburden smaller providers and new entrants to the market. 

Objective 2: Increase market transparency for both providers and users  

Alternative 1.  Market self-regulation 

Alternative 2.  Keep divergent national regimes 

Alternative 3.  Standardised transparency and information requirements at EU-level 

The option of market self-regulation has been dismissed given the currently low levels 
of  compliance  with  consumer  information  requirements  and  lack  of  transparency. 
National  rules  have  the  advantage  to  take  into  account  country  specific  payment 
services but limit efficiency, market transparency and choice for consumers in a wider 
European  market.  Standardisation  was  the  preferred  option  of  a  majority  of  payment 
industry and user associations. The highest economic benefits due to simplification and 
legal certainty are expected from EC legislation codifying all Community and national 
information requirements in one legal instrument.  

Objective 3: Rights and obligations of users and providers 

Alternative 1.  Keep status quo of different national rules 

Alternative 2.  Provide  legal  certainty  on  core  rights  and  obligations  for  users  and 

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providers  in  the  interests  of  a  high  level  of  consumer  protection  and  improved 
efficiency. 

Currently  there  are  25  different  sets  of  national  rules  which  served  the  payments 
market  well  as  long  as  cross-border  payments  and  the  Single  Market  did  not  play  an 
important  role.  With  the  creation  of  the  Single  Market  and  furthermore  with  the 
introduction  of  the  euro  harmonisation  becomes  a  necessity.  In  particular  where 
national  rules  which  maintain  national  differences,  hinder  cross  border  payments  and 
prevent the roll out of more efficient pan-European payment services. 

A consistent approach concerning the rights and obligations of providers and users will 
allow  for  more  efficiency,  a  higher  level  of  automation  and  pan-European 
straight-through processing.  

The Commission carried out a full impact assessment listed in the Work Programme, 
whose report is accessible on 
http://europa.eu.int/comm/secretariat_general/impact/docs/SEC_2005_1535_1_en.pdf 

3)  LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

The three main building blocks of the proposal are: 

Right to provide payment service to the public (Title II) 

The  harmonisation  of  market  access  requirements  of  non-credit  institution  payment 
service providers is designed to create a level-playing field, instil more competition in 
national markets and reflect market developments in recent years, , triggering market 
entry of a new generation of providers. The new license for payment institutions will 
also transpose Special Recommendation VI of the OECD Financial Action Task Force 
in  a  uniform  way.  The  introduction  of  a  derogation  for  certain  categories  of  money 
remitters  shall  facilitate  the  gradual  migration  of  these  providers  from  the  unofficial 
economy to the official sector. 

Transparency and information requirements (Title III)  

The Commission considers that competition, consumer choice and protection would be 
enhanced  by  clear  and  consistent  rules  on  transparency  for  payment  services.  The 
Directive  will  introduce  clear  and  succinct  information  requirements  for  payment 
services replacing 25 sets of national rules.  

Rights and obligations of users and providers of payment services (Title IV) 

Clarity and certainty on core rights and obligations of users and providers of payment 
services  are  essential  for  the'  development  of  modern  efficient  electronic  payment 
systems, for the trust of users and efficiency of modern business in a modern payment 
market.  

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•  Legal basis 

The legal basis for the proposal are Articles 47(2) and 95(1) of the EC Treaty.  

•  Subsidiarity principle 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the 
exclusive competence of the Community. 

The  objectives  of  the  proposal  cannot  be  sufficiently  achieved  by  the  Member  States 
for the following reason(s). 

The  rules  governing  payments  are  enshrined  in  multiple  national  legal  acts  often 
the  creating  of  European  payment  standards,  conventions  and 
preventing 
infrastructures.  Legal  uncertainty  for  providers  and  users  of  payment  services  and  a 
lack of harmonisation of core rights of providers and users hinders the roll-out of pan-
European payment systems, the free provision of services and competition of national 
payment markets.  

Community action will better achieve the objectives of the proposal for the following 
reason(s). 

The magnitude and complexity of the integration process of electronic retail payment 
markets  is  similar  to  the  introduction  of  the  euro  and  Member States  on  their  own 
cannot overcome the current obstacles and coordinate all involved players.  

The  co-existence  of  three  community  legal  acts  and  the  already  existing  diversity  of 
national rules in the 25 Member States create a fragmented and sometimes overlapping 
legal framework which has become an obstacle to the integration of payment markets. 

The  proposal  will  effect  full  harmonisation  of  issues  necessary  to  overcome  the 
obstacles  to  the  development  of  a  Single  Payment  Market  and  that  where  identified 
during open stakeholder consultation.  

The proposal therefore complies with the subsidiarity principle. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

The  proposed  Directive  will  leave  maximum  room  for  self-regulation  of  industry.  It 
will only harmonise what is necessary to overcome legal barriers to a Single Market, 
avoiding  regulating  issues  which  would  go  beyond  this  matter.  The  proposed  actions 
are  also  proportional  with  regard  to  existing  national  legislation  in  this  field  such  as 
civil law or criminal law. In certain areas national exceptions are possible and subject 
to  mutual  recognition.  Member  States  are  allowed  where  appropriate  to  introduce 
national alternatives or keep practices that are currently more efficient than envisaged 
in the Directive. 

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All  of  the  proposed  rules  have  been  subject  to  a  proportionality  test  and  intensive 
consultation to ensure appropriate and proportionate regulation. This is reflected in the 
rules  for  payment  institutions  and  the  waiver  clause,  in  information  requirements 
calibrated to the particular services and differentiation between users groups. 

•  Choice of instruments 

Proposed  instruments:  The  establishment  of  a  Single  Payment  Market  requires  both, 
self-regulation  of  industry  in  order  to  integrate  national  fragmented  payment 
infrastructures  and  services  and  regulatory  action  to  provide  the  necessary  legal 
foundations  for  this  process.  Therefore  the  Commission  proposes  a  Directive 
underpinning and facilitating self-regulation of industry. 

The means are adequate for the following reason(s). 

The  Commission  proposes  a  Directive  rather  than  a  Regulation  as  this  takes  into 
account  subsidiarity  and  proportionality  needs.  A  Directive  combined  with  full 
harmonisation will achieve the necessary level of legal certainty while leaving room to 
targeted national implementation. 

4)  BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

5)  ADDITIONAL INFORMATION 

•  Simulation, pilot phase and transitional period 

There  will  be  a  transitional  period  for  certain  already  established  payment  service 
providers with regard to compliance with the provisions in Title II of this Directive. 

•  Simplification 

The proposal provides for simplification of legislation, simplification of administrative 
procedures for public authorities (EC or national), and simplification of administrative 
procedures for private parties. 

The  proposed  Directive  will  provide  a  simplified  and  fully  harmonised  framework 
replacing  Directive 97/5/EC,  Recommendations  87/598/EEC,  88/590/EEC  and 
97/489/EC, and Article 8 of Directive 97/7/EC and Article 8 of Directive 2002/65/EC. 

Supervision  of  payment  service  providers  will  follow  a  harmonised  and  coherent 
approach  with  the  same  rules  for  all  Member States,  which  will  help  to  simplify 
administrative procedures.  

The proposal simplifies procedures for private parties by replacing 25 national sets of 
rules by one set of rules for the entire market.  

•  Repeal of existing legislation 

The adoption of the proposal will lead to the repeal of existing legislation. 

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2005/0245 (COD) 

Implementing the Community Lisbon programme: 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on payment services in the internal market 

and amending Directives 97/7/EC, 2000/12/EC and 2002/65/EC 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular the first 
and third sentences of Article 47(2) and Article 95 thereof, 

Having regard to the proposal from the Commission12, 

Having regard to the opinion of the European Economic and Social Committee13, 

Having regard to the opinion of the European Central Bank14, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty15, 

Whereas:  

(1) 

(2) 

(3) 

12 
13 
14 
15 

It is essential for the establishment of the internal market that all internal frontiers in 
the  Community  be  dismantled  so  as  to  enable  the  free  movement  of  goods,  persons, 
services and capital. The proper operation of the single market in payment services is 
therefore vital. At present, however, the lack of harmonisation in this area hinders the 
operation of that market. 

Currently,  the  payment  services  markets  of  the  Member States  are  organised 
separately,  along  national  lines  and  the  legal  framework  for  payment  services  is 
fragmented into 25 national legal systems. 

The  situation  has  not  been  sufficiently  remedied  by  the  Community  acts  already 
adopted, namely, Directive 97/5/EC of the European Parliament and of the Council of 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 

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27 January 1997 on cross-border credit transfers16 and Regulation (EC) No 2560/2001 
of the European Parliament and of the Council of 19 December 2001 on cross-border 
in  euro17,  nor  by  Commission  Recommendation 87/598/EEC  of 
payments 
8 December 1987  on  a  European  Code  of  Conduct  relating  to  electronic  payment 
(relations  between  financial  institutions,  traders  and  service  establishments,  and 
consumers)18,  Commission  Recommendation 88/590/EEC  of  17 November 1988 
concerning payment systems, and in particular the relationship between cardholder and 
card issuer19, or Commission Recommendation 97/489/EC of 30 July 1997 concerning 
transactions  by  electronic  payment  instruments  and  in  particular  the  relationship 
between  issuer  and  holder20.  Rather,  the  co-existence  of  national  provisions  and  an 
incomplete  Community  framework  has  given  rise  to  confusion  and  a  lack  of  legal 
certainty, owing to regulatory overlaps. 

It  is  vital,  therefore,  to  establish  at  Community  level  a  modern  and  coherent  legal 
framework for payment services. 

That  framework  should  ensure  the  coordination  of  national  provisions  on  prudential 
requirements, the access of new payment service providers to the market, information 
requirements,  and  the  respective  rights  and  obligations  of  payment  services  users. 
Within  that  framework,  the  provisions  of  Regulation  (EC) No 2560/2001,  which 
created  a  single  market  for  euro  payments  as  far  as  prices  are  concerned,  should  be 
maintained.  Those  of  Directive 97/5/EC  and 
in 
Recommendations 87/598/EEC, 88/590/EEC and 97/489/EC should be integrated in a 
single act with binding force.  

the  recommendations  made 

However, it is not appropriate for that legal framework to be fully comprehensive. Its 
application  should  be  confined  to  providers  whose  main  activity  consists  in  the 
provision of payment services to payment service users. Nor is it appropriate for it to 
apply  to  services  where  the  transfer  of  funds  from  the  payer  to  the  payee  or  its 
transport is executed solely in bank notes and coins or where the transfer is based on a 
cheque,  bill,  promissory  note  or  other  instruments,  vouchers  or  cards  drawn  upon  a 
payment service provider or other party with a view to placing funds at the disposal of 
the  payee.  Although  the  legal  framework  should  apply  to  payment  service  users  and 
their relationship with payment service providers whenever they use payment services, 
some provisions should not apply to transactions above a certain amount since the user 
is likely to be in a position to negotiate more specific and more appropriate terms and 
conditions with the payment service provider. 

It  is  necessary  to  specify  the  categories  of  payment  service  provider  which  may 
legitimately  provide  those  services  throughout  the  Community,  namely,  credit 
institutions  which  take  deposits  from  users  to  fund  payment  transactions  and  which 
requirements  under 
to 
continue 
should 
Directive 2000/12/EC  of 
the  Council  of 
20 March 2000  relating  to  the  taking  up  and  pursuit  of  the  business  of  credit 

the  European  Parliament  and  of 

the  prudential 

to  be 

subject 

(4) 

(5) 

(6) 

(7) 

16 
17 
18 
19 
20 

OJ L 43, 14.2.1997, p. 25. 
OJ L 344, 28.12.2001, p. 13. 
OJ L 365, 24.12.1987, p. 72. 
OJ L 317, 24.11.1988, p. 55. 
OJ L 208, 2.8.1997, p. 52. 

EN 

11 

   EN 

 
                                                 
(8) 

(9) 

institutions21,  electronic  money  institutions  which  issue  electronic  money  to  fund 
payment  transactions  and  which  should  continue  to  be  subject  to  the  prudential 
requirements  under  Directive 2000/46/EC  of  the  European  Parliament  and  of  the 
Council of 18 September 2000 on the taking up, pursuit of and prudential supervision 
of  the  business  of  electronic  money  institutions22,  and  post  office  giro  institutions 
which are so entitled under national or Community law. 

However, in order to remove legal barriers to market entry, it is necessary to establish 
a  single  licence  for  all  providers  of  payment  services  which  are  not  connected  to 
taking  deposits  or  issuing  e-money.  It  is  appropriate,  therefore,  to  introduce  a  fourth 
category of service provider, hereinafter “payment institutions”, by providing for the 
authorisation,  subject  to  a  set  of  strict  and  comprehensive  conditions,  of  natural  or 
legal  persons  outside  the  existing  categories  to  provide  payment  services  throughout 
the  Community.  Thus,  the  same  conditions  would  apply  Community-wide  to  such 
services.  

The  conditions  for  the  granting  and  maintenance  of  authorisation  as  payment 
institutions  should  include  prudential  requirements  proportionate  to  the  operational 
and  financial  risks  faced  by  such  bodies  in  the  course  of  their  business.  Those 
requirements  should  reflect  the  fact  that  payment  institutions  engage  in  more 
specialised and restricted activities, thus generating risks that are much narrower and 
easier to monitor and control than those that arise across the spectrum of activities of 
credit  institutions.  In  particular,  payment  institutions  should  be  prohibited  from 
accepting deposits from users and permitted to use only funds accepted from users for 
rendering  payment  services.  Provision  should  be  made  for  client  funds  to  be  kept 
separate  from  the  payment  institution’s  funds  for  other  business  activities.  Payment 
institutions  should  also  be  made  subject  to  effective  anti-money  laundering  and 
anti-terrorist financing requirements. 

(10) 

It  is  necessary  for  the  Member States  to  designate  the  authorities  responsible  for 
granting authorisation to payment institutions, for carrying out on-going controls and 
for  deciding  whether  to  withdraw  authorisation.  In  order  to  ensure  equality  of 
treatment,  Member States  should  not  apply  any  requirements  to  payment  institutions 
other  than  those  provided  for  in  this  Directive.  However,  all  decisions  made  by  the 
competent authorities should be contestable before the courts. In addition, the tasks of 
the  competent  authorities  should  be  without  prejudice  to  the  oversight  of  payment 
systems, which, according to the fourth indent of Article 105(2) of the Treaty, is a task 
to be carried out by the European System of Central Banks. 

(11)  Given  the  desirability  of  registering  the  identity  and  whereabouts  of  all  persons 
providing  payment  services  and  of  according  them  all  a  measure  of  acceptance, 
irrespective  of  whether  they  are  able  to  meet  the  full  range  of  conditions  for 
authorisation as payment institutions, so that none are forced into the black economy, 
it is appropriate to provide a mechanism whereby payment  providers unable to  meet 
all  those  conditions  may  nevertheless  be  treated  as  payment  institutions.  For  those 
purposes,  it  is  appropriate  to  allow  the  Member States  to  enter  such  persons  in  the 
register  of  payment  institutions  while  not  applying  all  of  the  conditions  for 

21 
22 

OJ L 126, 26.5.2000, p. 1. 
OJ L 275, 27.10.2000, p. 39. 

EN 

12 

   EN 

 
                                                 
authorisation. However, it is essential to make the possibility of derogation subject in 
each case to strict requirements relating to volume of transactions and importance for 
the public interest. It is also important to provide that, in cases where the derogation 
has been applied, payment services provided within the Community may be provided 
only in the Member State of registration. 

(12) 

It is essential to the function of a payment service provider that it be able to operate 
within payment systems or to participate in such systems. In order to ensure equality 
of  treatment  throughout  the  Community  as  between  the  different  categories  of 
payment  service  provider,  according  to  the  terms  of  their  prudential  licence,  it  is 
necessary to clarify the rules concerning access to the provision of payment services 
and  participation  in  payment  systems.  Provision  should  be  made  for  the  non-
discriminatory treatment of payment institutions and credit institutions as regards their 
operation within payment systems and their access thereto.  

(13)  A set of rules should be established in order to ensure transparency of conditions for 

payment services. 

(14)  This  Directive  should  not  apply  to  payment  transactions  made  in  cash  or  to  those 
based on paper cheques since, by their nature, they cannot be processed as efficiently 
as other means of payment, in particular electronic payments. 

(15)  The  rules  contained  in  this  Directive  on  transparency  of  conditions  for  payment 
services and those on rights and obligations linked to the provision and use of payment 
services  should  not  apply  where  the  amount  of  a  payment  transaction  exceeds 
EUR 50 000  because  payment  above  this  amount  are  not  generally  processed  on  the 
same  way,  are  often  channelled  through  different  networks  and  are  submitted  to 
different technical and legal procedures that should be maintained. 

(16)  This Directive should specify the obligations which payment service providers should 
have in providing information to payment service users who should receive the same 
high level of clear information about payment services in order to make well-informed 
choices and be able to shop around within the EU. In the interest of transparency this 
Directive  lays  down  requirements  needed  to  ensure  that  necessary  and  sufficient 
information  is  provided  to  payment  service  users  with  regard  to  both  the  payment 
service contract and the payment transaction. 

(17) 

It is essential to harmonise the transparency of conditions for payment services, since 
the  payment  service  user  needs  to  have  clear  information  about  payment  services  in 
order to make well-informed choices as to which to use. Requirements should be laid 
down  to  ensure  that,  without  saturating  the  payment  service  user  with  details, 
necessary  and  sufficient  information  is  provided  with  regard  to  the  payment  service 
contract as well as to the authorisation and execution of a payment transaction. 

(18)  The  information  required  should  be  proportionate  to  the  needs  of  users  and 
communicated  in  a  standard  manner.  However,  the  information  requirements  for  a 
single payment transaction should be different from those for a framework agreement 
which provides for a series of payment transactions. 

(19) 

In order to facilitate customer mobility, it should be possible for payment service users 
to  terminate  a  framework  contract  concluded  for  a  lengthy  period  or  an  indefinite 

EN 

13 

   EN 

 
period without incurring charges. However, that right should be made subject, where 
applicable, to a period of advance notice determined in the contract. 

(20)  Micro  payments  should  be  a  cheap  and  easy-to-use  alternative  in  the  case  of 
low-priced  goods  and  services  and  should  not  be  overburdened  by  excessive 
requirements.  The  relevant  information  requirements  and  rules  on  their  execution 
should therefore be simplified. Clear rules should be laid down as to how the payment 
service  user  is  to  authorise  transactions.  That  is  important  in  order  to  guarantee  user 
confidence and legal certainty for the parties involved in a payment transaction, since 
in  the  absence  of  proper  authorisation  those  transactions  would  be  invalid  and  the 
payer would be entitled to an immediate refund. It is essential to set out the obligations 
on both the payment service provider and the payment service user in order to ensure 
that  the  security  of  payment  verification  instruments  is  not  compromised  and  to 
determine, according to the applicable national law, whether a breach of contract has 
occurred and to assess the consequences of such a breach.  

(21) 

In order to provide an incentive for the payment service user to notify his provider of 
any theft or loss of a payment verification instrument without undue delay and thus to 
reduce  the  risk  of  unauthorised  transactions,  the  user  should  be  liable  only  for  a 
limited amount until such time as he notifies the payment service provider of the loss 
or  theft,  unless  the  payment  service  user  has  acted  fraudulently  or  with  gross 
negligence.  Moreover,  once  a  user  has  notified  a  payment  service  provider  that  his 
payment verification instrument may have been compromised, the user should not be 
required  to  cover  any  further  losses  stemming  from  unauthorised  use  of  that 
instrument. If the user’s payment verification instrument has not been lost or stolen, he 
should not bear any financial consequence of unauthorised use. 

(22)  Provision  should  be  made  for  the  allocation  of  losses  in  the  case  of  unauthorised 
payment transactions. However, those provisions should not apply to payment service 
users  which  are  enterprises  exceeding  the  size  of  a  micro  enterprise  as  defined  by 
Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition 
of micro, small and medium-sized enterprises, as published in the Official Journal of 
the  European  Union  on  20 May 200323,  since  such  enterprises  are  normally  in  a 
position to assess the risk of fraud and take countervailing measures. 

(23) 

(24) 

In cases where the user makes a claim for refund of a payment transaction where the 
amount was not specified, refund rights should not affect the liability of the payer vis-
à-vis the payee for goods or services ordered, consumed or legitimately charged or the 
users rights with regard to revocation of a payment order. 

In  view  of  the  speed  with  which  modern  fully  automated  payment  systems  process 
payment transactions, which means that after a certain point payment orders cannot be 
revoked  without  high  manual  intervention  costs,  it  is  necessary  to  specify  a  clear 
deadline  for  revocations,  in  order  to  allow  efficient  processing  while  ensuring  legal 
certainty for all the parties involved. It is appropriate to define that point in time as the 
point of acceptance by the payment service provider and to provide that it should be 
communicated explicitly or implicitly to the payment service user.  

23 

OJ L 124, 20.5.2003, p. 36. 

EN 

14 

   EN 

 
                                                 
(25) 

It is essential, for the fully integrated straight-through processing of payments and for 
legal  certainty  with  respect  to  the  fulfilment  of  any  underlying  obligation  between 
payment service users, that the full amount transferred by the payer be credited to the 
account  of  the  payee.  Accordingly,  it  should  not  be  possible  for  any  of  the 
intermediaries involved in the execution of payment transactions to make deductions 
from the amount transferred. However, it should be possible for the payee to enter into 
an  explicit  agreement  with  his  payment  service  provider  under  which  the  latter  may 
deduct his own fees. That should apply only in the case of payments effected solely in 
the currency of a Member State and not involving currency exchanges and where both 
payment service providers are located in the Community.  

(26)  With regard to fees, experience has shown that the sharing of fees between payer and 
payee is the most efficient system since it facilitates the straight-through processing of 
payments.  Provision  should  therefore  be  made  for  fees  to  be  levied  directly  on  the 
payer  and  the  payee  by  their  respective  payment  service  providers.  However,  that 
should apply only when both the payer’s and the payee’s payment service provider are 
located  in  the  Community  and  where  the  transaction  does  not  require  currency 
exchange.  

(27) 

In  order  to  improve  the  efficiency  of  payments  throughout  the  Community,  a 
maximum one-day execution time should be set for all payments initiated by the payer 
which  do  not  require  currency  conversion,  including  credit  transfers  and  money 
remittances.  For  all  other  payments,  such  as  payments  initiated  by  or  through  the 
payee,  including  direct  debits  and  card  payments,  in  the  absence  of  an  explicit 
agreement between the payment service provider and the payment service user setting 
a longer execution time, the one-day execution time should apply. In the case of purely 
national  payment,  however,  in  view  of  the  fact  that  national  payment  infrastructures 
are  often  highly  efficient  and  in  order  to  prevent  any  deterioration  in  current  service 
levels,  Member States  should  be  allowed  to  maintain  rules  specifying  an  execution 
time shorter than one day. 

(28)  Given the differences between the rules governing the operation of payment systems 
within  the  Community  and  those  governing  payment  systems  in  third  countries,  it  is 
appropriate that the provisions on execution for the full amount and execution time be 
restricted  to  cases  where  the  payment  service  providers  both  of  the  payer  and  of  the 
payee are located in the Community.  

(29) 

It  is  essential  for  the  payment  service  user  to  know  the  real  costs  and  charges  of 
payment services in order to make an appropriate choice. Accordingly, the use of non-
transparent pricing methods should not be allowed, since it is commonly accepted that 
those  methods  make  it  extremely  difficult  for  users  to  establish  the  real  price  of  the 
payment service. Specifically, the use of value dating to the disadvantage of the user 
should not be permitted. 

(30)  The smooth and efficient functioning of the payment system depends on the user being 
able  to  rely  on  the  payment  service  provider  executing  the  payment  transaction 
correctly  and  within  the  agreed  time.  However,  in  formal  terms,  there  is  little  to 
prevent  the  provider  from  doing  so.  First,  the  provider  is  in  a  position  to  assess  the 
risks  involved  in  the  payment  transaction  which  it  has  accepted  for  execution. 
Secondly, it is the provider which provides the payment system, makes arrangements 
to  recall  misplaced  or  wrongly  allocated  funds  and  decides  in  most  cases  on  the 

EN 

15 

   EN 

 
intermediaries involved in the execution of a transaction. Thirdly, the large number of 
payment transactions carried out makes it easier for the provider to mutualise the risk 
of errors or malfunctions in the payment system and to reflect that risk in its charges. 
In view of all those considerations, it is entirely appropriate to impose strict liability 
on the payment service provider in respect of the execution of a payment transaction 
accepted from the user. However, the provisions on strict liability should not apply in 
full  where  the  payment  service  provider  of  the  payee  is  located  outside  the 
Community. 

(31) 

(32) 

It  should  be  possible  for  the  payment  service  provider  to  specify  unambiguously  the 
information that it will require in order to execute a payment order. On the other hand, 
however,  in  order  to  avoid  fragmentation  and  not  to  jeopardise  the  setting  up  of 
integrated payment systems in the Community, Member States should not be allowed 
to require a particular identifier to be used for payment transactions. The strict liability 
of  the  payment  service  provider  should  be  limited  to  the  correct  execution  of  the 
payment  transaction  in  accordance  with  the  payment  order  of  the  payment  service 
user. 

In order to facilitate effective fraud prevention and combat payment fraud across the 
Community,  provision  should  be  made  for  the  efficient  exchange  of  data  between 
payment  service  providers  who  should  be  allowed  to  collect,  process  and  exchange 
personal data relating to persons involved in payment fraud. All those activities should 
be conducted in compliance with Directive 95/46/EC of the European Parliament and 
of the Council of 24 October 1995 on the protection of individuals with regard to the 
processing of personal data and on the free movement of such data24. 

(33) 

It  is  necessary  to  ensure  the  effective  enforcement  of  the  provisions  of  national  law 
adopted  pursuant  to  this  Directive.  Appropriate  procedures  should  therefore  be 
established  by  means  of  which  it  will  be  possible  to  pursue  complaints  against 
payment  service providers  which  do  not comply with those provisions and to ensure 
that, where appropriate, proportionate and dissuasive penalties are imposed. 

(34)  Without  prejudice  to  the  right  of  customers  to  bring  their  action  before  the  courts, 
Member States  should  ensure  an  accessible  and  cost-sensitive  resolution  of  conflicts 
between  payment  service  providers  and  payment  service  users  stemming  from  rights 
and obligations set out in this Directive. 

(35)  This Directive should be without prejudice to provisions of national law relating to the 
consequences as regards liability of inaccuracy in the expression or transmission of a 
statement. 

(36)  Since  it  is  necessary  to  review  the  efficient  functioning  of  this  Directive  and  to 
monitor progress on  the establishment of a Single Payment Market, the Commission 
should  be  required  to  produce  a  report  two  years  after  the  end  of  the  transposition 
period of this Directive. 

(37)  Since  the  provisions  of  Directive 97/5/EC  have  been  completely  changed,  that 

Directive should be repealed.  

24 

OJ L 281, 23.11.1995, p. 31. 

EN 

16 

   EN 

 
                                                 
(38) 

It  is  necessary  to  lay  down  more  detailed  rules  concerning  the  fraudulent  use  of 
payment  cards,  an  area  currently  covered  by  Directive 97/7/EC  of  the  European 
Parliament  and  of  the  Council  of  20 May 1997  on  the  protection  of  consumers  in 
respect  of distance contracts25 and  Directive 2002/65/EC of  the European Parliament 
and  of  the  Council  of  23 September 2002  concerning  the  distance  marketing  of 
consumer  financial  services  and  amending  Council  Directive 90/619/EEC  and 
Directives 97/7/EC  and 98/27/EC26.  Those  Directives  should  therefore  be  amended 
accordingly. 

(39)  Since,  pursuant  to  Directive 2000/12/EC,  financial  institutions  are  not  subject  to  the 
rules  applicable  to  credit  institutions,  they  should  be  made  subject  to  the  same 
requirements as payment institutions so that they are able to provide payment services 
throughout  the  Community.  Directive 2000/12/EC  should  therefore  be  amended 
accordingly. 

(40) 

In the interests of legal certainty, it is appropriate to make transitional arrangements in 
accordance  with  which  persons  who  have  commenced  the  activities  of  payment 
institutions in accordance with the national law in force before the entry into force of 
this  Directive  to  continue  those  activities  within  the  Member  State  concerned  for  a 
specified period.  

(41)  Since the objectives of the proposed action, that is to say, the establishment of a single 
market  in  payment  services,  cannot  be  sufficiently  achieved  by  the  Member States 
because  it  requires  the  harmonisation  of  a  multitude  of  different  rules  currently 
existing in the legal systems of the various Member States and can therefore be better 
achieved  at  Community  level,  the  Community  may  adopt  measures,  in  accordance 
with  the  principle  of  subsidiarity  as  set  out  in  Article 5  of  the  Treaty.  In  accordance 
with the principle of proportionality, as set out in that Article, this Directive does not 
go beyond what is necessary in order to achieve those objectives. 

(42)  The measures necessary for the implementation of this Directive should be adopted in 
accordance  with  Council  Decision 1999/468/EC  of  28 June 1999  laying  down  the 
procedures for the exercise of implementing powers conferred on the Commission27, 

HAVE ADOPTED THIS DIRECTIVE: 

TITLE I 
Subject-matter, scope and definitions 

Article 1 
Subject matter 

This Directive lays down the rules in accordance with which Member States shall distinguish 
the following four categories of payment service provider: 

25 

26 
27 

OJ L 144,  4.6.1997,  p. 19;  Directive  as  last  amended  by  Directive  2005/29/EC  (OJ L 149,  11.6.2005, 
p. 22). 
OJ L 271, 9.10.2002, p. 16; Directive as amended by Directive 2005/29/EC. 
OJ L 184, 17.7.1999, p. 23. 

EN 

17 

   EN 

 
                                                 
(a) 

(b) 

(c) 

(d) 

credit institutions within the meaning of Directive 2000/12/EC; 

electronic money institutions within the meaning of Directive 2000/46/EC; 

post  office  giro  institutions,  as  referred  to  in  the  second  indent  of  Article 2(3)  of 
Directive 2000/12/EC,  which  are  entitled  under  national  or  Community  law  to 
provide payment services; 

other  natural  or  legal  persons  who  have  been  granted  authorisation  in  accordance 
with Article 6 of this Directive to provide and execute payment services throughout 
the Community, hereinafter “payment institutions”.  

This  Directive  also  lays  down  rules  concerning  transparency  conditions,  and  the  respective 
rights and obligations of users and providers, in relation to the provision of payment services 
as a regular occupation or business activity.  

Central  banks  acting  as  monetary  authorities  and  public  authorities  which  provide  payment 
services are not considered to be payment service providers.  

Article 2 
Scope 

1. 

This Directive shall apply only to business activities, listed in the Annex, consisting 
in  the  execution  of  payment  transactions  on  behalf  of  a  natural  or  legal  person, 
hereinafter “payment services”, where at least one of the payment service providers 
is located in the Community. 

However,  for  payment  services  where  the  amount  of  the  transaction  exceeds 
EUR 50 000, Titles III and IV shall not apply. 

For  the  purposes  of  this  Directive,  a  payment  transaction  shall  consist  in  the  act, 
initiated  by  the  payer  or  by  the  payee,  of  depositing,  withdrawing  or  transferring 
funds from a payer to a payee, irrespective of any underlying obligations between the 
payment service users. 

2. 

Save where otherwise provided, this Directive shall apply to payment services made 
in any currency. 

Article 3 
Negative scope 

This Directive shall not apply to the following: 

(a) 

(b) 

transactions consisting solely of a transfer of cash from the payer to the payee; 

professional  collection  and  delivery  of  cash,  including  its  transport,  without 
transforming  the  cash  into  scriptural  money,  or  into  electronic  money  within  the 
meaning of Directive 2000/46/EC; 

EN 

18 

   EN 

 
(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

payment transactions consisting in the non-professional cash collection and delivery 
within the framework of a non-profit or charitable activity; 

cash  refunds  provided  by  the  payee  to  the  payer  after  a  payment  transaction 
following  an  explicit  request  by  the  payment  service  user  made  just  before  the 
execution  of  a  payment  transaction  through  a  payment  card  and  completely 
independent of the cost of the good or services purchased; 

change of foreign currency into local currency and vice versa , that is to say, cash to 
cash  operations,  where  the  funds  are  not  held  as  a  cash  deposit  on  a  payment 
account; 

payment  transactions  based  on  any  of  the  following  documents  drawn  on  the 
payment service provider with a view to placing funds at the disposal of the payee: 

(i) 

paper  cheques  in  accordance  with  the  Geneva  Convention  of  19 March 1931 
providing for a Uniform Law for Cheques; 

(ii)  paper cheques similar to those referred to in point (i) and governed by the law 

of Member States which are not party to the 1931 Geneva Convention; 

(iii)  paper-based vouchers; 

(iv)  paper-based traveller's cheques;  

(v)  paper-based promissory notes; 

payment transactions carried out within a payment or security clearing and settlement 
system or between clearing or settlement agents, central counterparties and/or central 
banks,  and  payment  service  providers,  as  well  as  their  tied  agents  or  subsidiaries 
thereof, except for Article 23; 

services  provided  by  technical  service  providers,  which  support  the  provision  of 
payment services, without them entering at any time into possession of the funds to 
be transferred, including processing and storage of data, trust and privacy protection 
services,  data  and  entity  authentication,  IT  and  communication  network  provision, 
provision and maintenance of terminals and devices used for payment services;  

services that can be used to acquire goods or services only within a limited network 
of affiliated service providers and are based on instruments like vouchers and cards 
in so far as such instruments are not redeemable; 

payment transactions executed by means of a mobile telephone or any other digital or 
IT device, where all the following conditions are met: 

(i) 

the service provider operating the telecommunication or IT system or network 
is  closely  involved  in  the  development  of  the  digital  goods  or  electronic 
communication services provided; 

(ii) 

the  goods  and  services  cannot  be  delivered  in  the  absence  of  the  service 
provider;  

EN 

19 

   EN 

 
(iii) 

there is no alternative option for remuneration. 

(k) 

payment transactions carried out between payment service providers as well as tied 
agents or subsidiaries, without prejudice to Article 23 which applies in any case. 

Article 4 
Definitions 

For the purposes of this Directive, the following definitions shall apply: 

(1) 

"home Member State" means any of the following:  

(i) 

if the payment institution is a natural person, the Member State where the head 
office of the payment service provider is situated;  

(ii) 

if  the  payment  institution  is  a  legal  person,  the  Member State  in  which  its 
registered office is situated; 

(iii) 

if the payment institution has, under its national law, no registered office, the 
Member State in which its head office is situated;  

"host Member State" means the Member State other than the home Member State in 
which a payment service provider has a branch or a tied agent or provides payment 
services;  

"payment  system"  means  a  funds  transfer  system  with  formal  and  standardised 
arrangements  and  common  rules  for  the  processing,  clearing  and/or  settlement  of 
payment transactions ; 

"payer" means a natural or legal person who has the right of disposal of funds and 
who allows them to be transferred to a payee; 

"payee" means a natural or legal person who is the intended final recipient of funds 
which have been the subject of a payment transaction; 

"payment service user" means a natural or legal person who makes use of a payment 
service in the capacity of either payer or payee, or both;  

"payment  account"  means  an  account  held  in  the  name  of  a  payment  service  user 
which is used exclusively for payment transactions; 

"funds"  means  cash,  scriptural  money  and  electronic  money  as  referred  to  in 
Directive 2000/46/EC; 

“availability of funds” means that the funds on a payment account may be used by 
the payment service user without fees being charged; 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

"payment order" means any instruction by a payer or payee to his payment service 
provider requesting the execution of a payment transaction; 

EN 

20 

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(11) 

(12) 

(13) 

(14) 

(15) 

(16) 

(17) 

(18) 

(19) 

"value  date"  means  a  reference  time  used  by  a  payment  service  provider  for  the 
calculation of interest on the funds transferred from or into a payment account; 

"reference  exchange  rate"  means  the  exchange  rate  which  is  used  as  the  basis  to 
calculate  any  currency  exchange  and  which  comes  from  a  source  which  can  be 
verified by both parties of a payment service agreement; 

"authentication"  means  a  procedure  which  allows  the  payment  service  provider  to 
verify that the user issuing the payment order is authorised to do so; 

"reference  interest  rate"  means  the  interest  rate  which  is  used  as  the  basis  to 
calculate  any  interest  to  be  applied  and  which  comes  from  a  source  which  can  be 
verified by both parties to a payment service agreement; 

"unique identifier" means the information specified by the payment service provider 
and to be provided by the payment service user to identify unambiguously the other 
payment service user involved in a payment transaction, and consisting of the IBAN 
(International  Bank  Account  Number),  the  BIC  (Bank  Identifier  Code),  a  bank 
account number, a card number or a name; 

"tied  agent"  means  a  natural  or  legal  person  which  acts  on  behalf  of  a  payment 
institution in carrying out payment services; 

"payment  verification  instrument"  means  any  personalised  device(s)  and/or  set  of 
procedures used by the payment service user in order to enable the payment service 
provider to authenticate a payment order. If it is not provided by the payment service 
provider,  the  payment  service  provider  and  the  payment  service  user  may  agree  on 
the use of any other instrument for the authentication of payment orders which may 
also serve other purposes; 

"means  of  distance  communication"  refers  to  any  means  which,  without  the 
simultaneous  physical  presence  of  the  payment  service  provider  and  the  payment 
service user, may be used for the conclusion of a payment services contract; 

"durable  medium"  means  any  instrument  which  enables  information  addressed 
personally to the payment service user to be stored in a manner accessible for future 
reference for a period of time adequate to the purposes of the information and which 
allows  the  unchanged  reproduction  of  the  information  stored;  in  particular,  durable 
medium  covers  printouts  by  account  printers,  floppy  disks,  CD-ROMs,  DVDs  and 
hard  drives  of  personal  computers  on  which  electronic  mail  is  stored  but  excludes 
Internet sites, unless such sites meet the criteria specified in the first sentence of this 
point. 

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TITLE II 
Payment service providers 

Chapter 1 
Payment institutions 

SECTION 1 
GENERAL RULES 

Article 5 
Applications for authorisation 

For  authorisation  as  a  payment  institution,  a  written  application  shall  be  submitted  to  the 
competent authorities of the home Member State, together with the following: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

a  programme  of  operations,  setting  out  in  particular  the  type  of  payment  service 
envisaged; 

a  business  plan  including  a  tentative  budget  calculation  for  the  first  three  financial 
years  which  would  allow  the  presumption  that  the  applicant  is  able  to  employ  the 
appropriate and proportionate systems, resources and procedures to operate soundly; 

a  description  of  the  applicant’s  administrative  and  accounting  procedures,  such  as 
would  allow  the  presumption  that  it  conducts  sound  and  adequate  procedures  and 
controls; 

a description of the internal control mechanisms which the applicant has established 
in  order  to  comply  with  obligations  in  relation  to  money  laundering  under 
Directive 2005/60/EC of the European Parliament and of the Council28; 

a description of the applicant’s risk management procedures; 

a  description  of  the  applicant’s  structural  organisation  and,  where  applicable,  of  its 
cooperation with a national or international payment system; 

the  identity  of  persons  holding  in  the  applicant,  directly  or  indirectly,  qualifying 
holdings within the meaning of Article 1(10) of Directive 2000/12/EC, and the size 
of their effective holding; 

where the applicant is a legal person, the identity of the natural persons who are its 
representatives, its majority shareholders and who act as directors as well as evidence 
that those persons are of good repute and have appropriate knowledge and ability to 
perform payment services; 

28 

OJ L 309, 25.11.2005, p. 15. 

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(i) 

(j) 

(k) 

the identity of the lead manager and evidence that the person who effectively directs 
the applicant’s business is of good repute and has appropriate knowledge and ability 
to perform payment services; 

the applicant’s legal status; 

the address from which the relevant documents may be obtained. 

For  the  purposes  of  point (c),  the  applicant  shall  provide  a  description  of  the  organisational 
arrangements it has set up with a view to taking all reasonable steps to protect the interests of 
its users and to ensure continuity and reliability in the performance of payment services. 

Article 6 
Granting 

Authorisation shall be granted if the information and evidence accompanying the application 
complies with all the requirements laid down in Article 5.  

The application for authorisation shall not be examined in the light of requirements other than 
those laid down in Article 5. 

The authorisation shall be valid in all Member States and shall allow the payment institution 
concerned to provide payment services throughout the Community, either under the freedom 
to provide services or the freedom of establishment. 

Article 7 
Communication of decision 

Within  three  months  of  receiving  the  application  or,  should  the  application  be  incomplete, 
within  three  months  of  receiving  the  information  required  for  the  decision,  the  competent 
authority shall inform the applicant whether its application has been granted or refused. 

Reasons shall be given whenever an authorisation is refused.  

Article 8 
Registration 

Member States shall establish a register of payment institutions.  

The register shall be updated on a regular basis. It shall be publicly available for consultation 
and accessible online. 

Article 9 
Maintenance of authorisation 

Where any change affects the accuracy of information and evidence provided under Article 5, 
the payment institution shall without undue delay inform the competent authority of its home 
Member State accordingly. 

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Article 10 
Activities 

1. 

Payment institutions shall be entitled to engage in the following activities: 

(a) 

the provision of payment services; 

(b) 

(c) 

the  provision  of  operational  and  related  ancillary  services  such  as  the 
guaranteeing  execution  of  payment  transactions,  foreign  exchange  services, 
safekeeping activities, and storage and processing of data; 

the  accessing  and  operation  of  payment  systems  for  the  purposes  of 
transferring,  clearing  and  settling  funds,  including  any  instruments  and 
procedures relating to the systems. 

In  the  context  of  point (a),  funds  received  by  payment  institutions  from  payment 
service users with a view to the provision of payment services shall not constitute a 
the  meaning  of  Article 3  of 
deposit  or  other 
Directive 2000/12/EC, 
of 
Directive 2000/46/EC.  

electronic  money  within 

repayable 
or 

the  meaning 

funds  within 

2. 

3. 

1. 

2. 

3. 

Funds received from payment service users and specifically accepted in connection 
with  a  payment  service  shall  not  be  used  by  payment  institutions  to  support  other 
business  activities  other  than  payment  services.  The  payment  institution  shall  keep 
separately  in  its  books  the  payment  service  users  funds,  accepted  for  a  payment 
transaction, from other funds accepted for activities other than payment services.  

The business activities of authorised payment institutions shall be non-exclusive and 
shall not be restricted to payment services, having regard to the applicable national 
and Community law.  

SECTION 2 
OTHER REQUIREMENTS 

Article 11 
Use of tied agents, outsources or subsidiaries 

In cases where a payment institution intends to provide payment services through a 
tied  agent  or  a  subsidiary,  it  shall  communicate  the  name  and  address  of  the  tied 
agent or subsidiary to be used to the competent authorities in its home Member State. 

Where a payment institution intends to outsource some or all of its operations, it shall 
inform the competent authority accordingly. 

Payment  institutions  shall  ensure  that  tied  agents  or  subsidiaries  acting  on  their 
behalf inform payment service users accordingly. 

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Article 12 
Liability 

1. 

2. 

Member States shall ensure that, where payment institutions rely on third parties for 
the performance of operational functions, those payment institutions take reasonable 
steps to avoid undue operational risk.  

Member States shall require that payment institutions remain fully liable for any acts 
of  their  managers,  employees,  or  any  tied  agent  or  subsidiary,  pursuant  to  this 
Directive. 

Article 13 
Record-keeping 

Member States  shall  require  payment  institutions  to  keep  records  of  all  services  and 
transactions for a reasonable time, but not more than five years. 

Article 14 
Place of the head office 

Member States shall require any payment institution which is a legal person and which, under 
the national law of its home Member State, has a registered office to have its head office in 
the same Member State as its registered office. 

Any payment institution not covered by the first paragraph shall be required to have its head 
office in the Member State in which it actually carries on its business. 

SECTION 3 
COMPETENT AUTHORITIES AND SUPERVISION 

Article 15 
Designation of competent authorities 

1. 

Member States  shall  designate  as  the  competent  authorities  responsible  for 
implementation  of  this  Title  either  public  authorities,  or  bodies  recognised  by 
national  law  or  by  public  authorities  expressly  empowered  for  that  purpose  by 
national law.  

The competent authorities shall be such as to guarantee independence from economic 
actors and to avoid conflicts of interest. They shall not be payment institutions, credit 
institutions electronic-money institutions, or post office giro institutions. 

The Member States shall inform the Commission accordingly. 

2. 

Member States  shall  ensure  that  the  competent  authorities  designated  under 
paragraph 1 possess all the powers necessary for the performance of their duties. 

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3. 

Where there is more than one competent authority for matters covered by this Title 
on its territory, a Member State shall ensure that those authorities cooperate closely 
so that they can discharge their respective duties effectively. 

Article 16 
Supervision 

Member States  shall  ensure  that  the  controls  exercised  by  the  competent  authorities  for 
checking continued compliance with this Title are proportionate, adequate and responsive to 
the risks to which payment institutions are exposed.  

In  order  to  check  compliance  with  this  Title,  the  competent  authorities  may  take  only  the 
following steps: 

(a) 

(b) 

(c) 

(d) 

(e) 

1. 

2. 

to  require  the  payment  institution  to  provide  any  information  needed  to  monitor 
compliance; 

to carry out on-site inspections with the payment institution, an outsourced entity, a 
tied agent or a subsidiary under the responsibility of the payment institution; 

to issue recommendations and guidelines; 

to issue warnings and impose proportionate penalties in cases of non-compliance; 

to suspend or withdraw authorisation in cases where the conditions for authorisation 
in accordance with Article 5 are no longer fulfilled. 

Article 17 
Professional secrecy 

Member State  shall  ensure  that  all  persons  working  or  who  have  worked  for  the 
competent  authorities,  as  well  as  experts  acting  on  behalf  of  the  competent 
authorities, are bound by the obligation of professional secrecy, without prejudice to 
cases covered by criminal law. 

In  the  exchange  of  information  in  accordance  with  Article 19,  professional  secrecy 
shall be strictly applied to ensure the protection of individual and business rights. 

Article 18 
Right to apply to the courts 

Member States shall ensure that decisions taken by the competent authorities in respect of a 
payment institution in pursuance of laws, regulations and administrative provisions adopted in 
accordance with this Directive may be contested before the courts.  

The first paragraph shall apply also in respect of failure to act. 

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26 

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Article 19 
Exchange of information 

The  competent  authorities  of  the  different  Member States  shall  cooperate  and,  in  particular, 
exchange information in order to ensure proper application of this Directive.  

Member States  shall,  in  addition,  allow  exchanges  of  information  between  their  competent 
authorities and the following: 

(a) 

(b) 

(c) 

1. 

2. 

3. 

4. 

the competent authorities of the host Member State responsible for the authorisation 
and supervision of payment institutions; 

central  banks,  the  European  System  of  Central  Banks  and  the  European  Central 
Bank, in their capacity as monetary authorities, and, where appropriate, other public 
authorities responsible for overseeing payment and settlement systems; 

other  relevant  authorities  designated  under  this  Directive  and  other  Community 
legislation applicable to payment service providers. 

Article 20 
Exercise of the right of establishment and freedom to provide services 

Any authorised payment institution wishing to carry on its activities for the first time 
in  a  Member State  other  than  its  home  Member State,  in  exercise  of  the  right  of 
establishment  or  the  freedom  to  provide  services,  shall  so  inform  the  competent 
authorities in its home Member State. 

Within  one  month  of  receiving  that  information,  the  competent  authorities  in  the 
home Member State shall inform the competent authorities in the host Member State 
of  the  name  and  address  of  the  payment  institution  and  of  the  kind  of  payment 
services it intends to provide on the territory of the host Member State. 

In  order  to  carry  out  the  controls  and  take  the  necessary  steps  provided  for  in 
Article 16 in respect of a branch, a tied agent or a subsidiary of a payment institution 
located in the territory of another Member State, the competent authority of the home 
Member State  shall  cooperate  with 
the  host 
Member State.  

the  competent  authorities 

in 

By  way  of  cooperation  in  accordance  with  paragraphs 1  and  2,  the  competent 
authority of the home Member State shall notify the competent authority of the host 
Member State  whenever  it  wishes  to  carry  out  an  on-site  inspection  within  the 
territory of the latter. 

However,  if  both  authorities  so  wish,  the  competent  authority  of  the  home 
Member State  may  delegate  to  the  competent  authorities  of  the  host  Member State 
the task of carrying out on-site inspections with the institution concerned. 

Competent  authorities  shall  provide  each  other  with  all  relevant  information,  in 
particular in the case of infringements or suspected infringements by a branch, a tied 
agent or a subsidiary. 

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SECTION 4 
DEROGATION 

Article 21 
Conditions 

1. 

By  way  of  derogation  from  point (d)  of  the  first  paragraph  of  Article 1, 
Member States  may,  on  a  case  by  case  basis,  allow  natural  or  legal  persons  to  be 
entered  in  the  register  established  under  Article 8,  without  application  of  the 
procedure set out in Section 1, where both the following conditions are satisfied: 

(a) 

the total business activities of the person concerned, including any tied agent or 
subsidiary for which it assumes full responsibility, generates a total amount of 
funds outstanding which were accepted for the provision of payment services 
and  which  does  not  exceed  EUR 5 million  on  average  over  a  month  and 
EUR 6 million at any given point in time; 

(b) 

such  registration  is  considered  to  be  in  the  public  interest  for  either  of  the 
following reasons: 

(i) 

the  person  concerned  plays  a  vital  role  in  financial  intermediation, 
providing  access  to  payment  services  for  underprivileged  social  groups, 
in  particular  where  the  provision  by  other  providers  of  the  services  in 
question is unlikely or would take a long time; 

(ii) 

it  is  necessary  for  the  effective  implementation  of  money  laundering 
rules or mechanisms to prevent terrorist financing. 

2. 

The persons referred to in paragraph 1 shall be treated as payment institutions. 

However, they shall be allowed to provide payment services within the Community 
only within the Member State of registration. 

Member States  may  also  provide  that  they  may  engage  only  in  certain  of  the 
activities listed in Article 10. 

3. 

The persons referred to in paragraph 1 shall notify the competent authorities of any 
change  in  their  situation  which  is  relevant  to  the  condition  specified  in  point (a)  of 
paragraph 1.  

Article 22 
Notification and information 

If a Member State avails itself of the derogation provided for in Article 21, it shall notify the 
Commission  accordingly  by  the  date  specified  in  the  first  paragraph  of  Article 85(1)  at  the 
latest and shall notify it forthwith of any subsequent change.  

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28 

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In  addition,  it  shall  inform  the  Commission  of  the  number  of  payment  service  providers 
concerned and shall, on an annual basis, inform the Commission of the total amount of funds 
outstanding, as referred to in point (a) of Article 21. 

Chapter 2 
Common provisions 

Article 23 
Access to and operation of payment systems 

1. 

Member States shall ensure that rules on access to and operation of payment systems 
shall  be  objective  and  proportionate  and  shall  not  inhibit  access  more  than  is 
necessary to safeguard against specific risks and to protect the financial safety of the 
payment system. 

Payment systems may not impose any of the following requirements: 

(a) 

a ban on participation in other payment systems; 

(b) 

a  rule  which  discriminates  between  authorised  payment  service  providers  in 
relation to the rights, obligations and entitlements of participants; 

(c) 

any restriction on the basis of institutional status. 

2. 

Paragraph 1 shall be without prejudice to requirements imposed on participants in a 
payment and securities settlement system by Community legislation and in particular 
by Directive 98/26/EC of the European Parliament and of the Council29. 

29 

OJ L 166, 11.6.1998, p. 45.  

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TITLE III 
Transparency of conditions for payment services 

Chapter 1 
Single payment transactions 

Article 24 
Scope 

This  Chapter  applies  to  single  payment  transactions  not  covered  by  a  framework  contract 
within the meaning of Article 29. 

Article 25 
Prior general information 

1. 

2. 

Member States shall require that the payment service provider is to communicate to 
the  payment  service  user  on  paper  or  on  another  durable  medium  available  and 
accessible to him the conditions in accordance with Article 26. 

The  payment  service  provider  shall  do  so  in  good  time  before  the  payment  service 
user is bound by any payment service contract covering a single payment transaction 
or the offer. 

If the payment transaction has been concluded at the request of the payment service 
user  using  a  means  of  distance  communication  which  does  not  enable  the  payment 
service  provider  to  comply  with  paragraph 1,  the  payment  service  provider  shall 
fulfil his obligation under the first subparagraph of paragraph 1 as soon as reasonably 
possible after the conclusion of the contract. 

Article 26 
Communication of conditions 

1. 

Member States  shall  ensure  that  the  conditions  communicated  comprise  the 
following: 

(a) 

a description of the respective obligations and liabilities of the payment service 
provider and the payment service user, in relation to the provision and use of 
the payment service, including in particular the following: 

(i) 

specification  of  the  information  or  unique  identifier  that  has  to  be 
provided by the payment service user in order for a payment order to be 
properly executed; 

(ii) 

the execution time for the payment service to be provided; 

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(iii)  where applicable, the conditions concerning the provision and use of the 
payment  service,  including  in  particular  safekeeping  requirements  for 
payment  verification  instruments  and  the  risks  involved  if  these  are  not 
taken and how to notify the payment service provider for the purposes of 
Article 46(b); 

(iv) 

the liability for the execution of a payment transaction; 

(v) 

the information to be provided in accordance with Directive 2005/…/EC; 

(vi) 

the availability of appropriate funds; 

(b) 

(c) 

a  clear  reference  to  the  point  in  time  of  acceptance  of  a  payment  order  as 
defined in Article 54(1); 

all  charges  payable  by  the  payment  service  user  to  the  payment  service 
provider  and,  where  applicable,  the  exchange  rate  applied  to  the  payment 
transaction; 

(d) 

an indication of the law applicable to the contract and the competent court; 

(e) 

an indication of the redress and complaint procedures available to the payment 
service  user  in  accordance  with  Chapter 4  of  Title IV  and  the  method  of 
accessing them;  

(f) 

an  indication  of  where  any  other  information  may  be  made  available  and  be 
consulted. 

In  the  case  of  payment  transactions  covered  by  Article 58(2),  the  payment  service 
provider  shall,  for  the  purposes  of  point (c),  give  a  bona fide  estimate  of  any 
deductions to be envisaged for the payment transaction. 

2. 

The  conditions  specified  in  paragraph  1  shall  be  set  out  in  easily  understandable 
words and in a clear and readable form, in an official language of the Member State 
where the payment service is offered or in any other language agreed by the parties. 

Article 27 
Information to be made available to the payer after acceptance 

Subsequent  to  the  acceptance  of  the  payment  order  for  execution,  the  payment  service 
provider shall make available to the payer, in the same way as provided for in Articles 25(1) 
and 26(2), at least the following information: 

(a) 

(b) 

a  reference  enabling  the  payment  service  user  to  identify  the  payment  transaction 
and, where appropriate, the information relating to the payee; 

the  amount  of  the  payment  transaction  and  of  any  commission  fees  and  charges 
applied to the payment transaction that the payer had to pay to his payment service 
provider; 

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(c) 

where relevant, the exchange rate used in the payment transaction if it is applied by 
the payer's payment service provider. 

Article 28 
Information to be made available to the payee after receipt of the funds 

Subsequent  to  making  funds  received  for  the  payee  available  to  him,  the  payment  service 
provider shall make available to the payee, in the same way as provided for in Articles 25(1) 
and 26(2), at least the following information: 

(a) 

(b) 

(c) 

(d) 

the  reference  of  the  payer  and  the  information  transferred  with  the  payment 
transaction enabling the payee to identify the payment transaction; 

the full amount of the payment transaction transferred from the payer; 

the amount of any commission fees and charges applied to the payment transaction 
payable  by  the  payee  to  his  payment  service  provider  or  to  any  intermediary  for 
receiving the payment;  

where applicable, the exact exchange rate used in the payment transaction if it was 
applied by the payee's payment service provider. 

Chapter 2 
Framework Contracts 

Article 29 
Scope 

This  Chapter  applies  to  payment  transactions  covered  by  a  payment  service  agreement 
characterised by the fact that it commits a payment service provider to execute in the future 
successive payment transactions or individual payment transactions on the order of the payer 
if  the  agreed  conditions  are  met.  That  agreement,  hereinafter  “framework  contract”,  may 
contain the obligations and conditions for setting up a payment account; 

Article 30 
Prior general information 

1. 

2. 

Member States  shall  require  that  in  good  time  before  the  payment  service  user  is 
bound  by  any  framework  contract  or  the  offer,  the  payment  service  provider  is  to 
communicate  to  the  payment  service  user  on  paper  or  on  another  durable  medium, 
available  and  accessible  to  the  payment  service  user,  the  conditions  in  accordance 
with Article 31. 

If the contract has been concluded at the request of the payment service user using a 
means  of  distance  communication  which  does  not  enable  the  payment  service 
provider  to  comply  with  paragraph 1,  the  payment  service  provider  shall  fulfil  his 
obligations under that paragraph as soon as reasonably possible after the conclusion 
of the contract. 

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Article 31 
Communication of conditions 

1. 

Member States  shall  ensure  that  the  conditions  communicated  comprise  the 
following: 

(a) 

the  technical  requirements  with  respect  to  the  payment  service  user’s 
communication  equipment  authorised  for  use,  including  the  way  in  which  it 
can  be  used  and  the  means  of  communication  agreed  by  the  parties  for  the 
transmission of information under this Directive; 

(b) 

a description of the respective obligations and liabilities of the payment service 
provider  and  the  payment  service  user  in  relation  to  the  provision  and  use  of 
the payment service, including in particular the following: 

(i) 

specification  of  the  information  or  unique  identifier  that  has  to  be 
provided by the payment service user in order for a payment order to be 
properly executed; 

(ii) 

the  execution  time  and  the  relevant  maximum  execution  time  for  the 
payment services to be provided; 

(iii)  an  indication  of  the  right  of  the  payment  service  user  to  terminate  an 
initial  payment  service  agreement  and  any  agreements  relating  to  that 
right in accordance with Article 34; 

(iv)  where  appropriate,  a  description  of  the  steps  that  the  payment  service 
user is to take in order to keep safe a payment verification instrument, the 
risks  involved  if  the  steps  are  not  taken  and  how  to  notify  the  payment 
service provider for the purposes of Article 46(b);  

(v)  where  applicable,  an  explicit  reference  in  accordance  with  Article 43(2) 
to the fact that the payment service provider reserves the right to block a 
payment verification instrument if the spending pattern gives rise to the 
suspicion  of  fraudulent  use,  and  the  person  that  the  payment  service 
provider must contact in such cases, if applicable; 

(c) 

(d) 

(e) 

spending  ceilings  envisaged  for  specific  payment  services  in  accordance  with 
Article 43(1); 

a definition of the point in time of acceptance of a payment order as defined in 
Article 54(1); 

all  charges  and  interest  payable  by  the  payment  service  user  to  the  payment 
service provider; 

(f)  where  applicable,  the  interest  and  exchange  rates  applied  to  payment 
transactions,  including,  if  applicable,  the  reference  interest  or  exchange  rate, 
the  relevant  date  for  determining  such  a  rate  and  the  way  to  calculate  the 
applied interest or exchange rate based on the reference rate; 

(g) 

the law applicable to the contract and the competent court; 

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(h) 

an indication of the redress and complaint procedures available to the payment 
service  user  in  accordance  with  Chapter 4  of  Title IV  and  the  method  of 
accessing them; 

(i) 

any  information  on  how  the  payment  service  user  can  access  the  information 
specified in Article 32. 

In  cases  where  an  aggregate  fee  is  charged,  such  as  a  merchant  service  charge  or 
account management fee, the information provided for the purposes of point (e) shall 
make  transparent  the  prices  of  the  different  service  elements  covered  by  the 
aggregate fee. 

2. 

The  conditions  shall  be  set  out  in  easily  understandable  words  and  in  a  clear  and 
readable  form,  in  an  official  language  of  a  Member State  or  in  any  other  language 
agreed by the parties. 

Article 32 
Information to be provided after entry into force 

After the entry into force of a framework agreement, the payment service provider shall make 
available to a payment service user in an easily accessible manner all the conditions specified 
in Article 31(1).  

In addition and where relevant, the payment service provider shall make available in the same 
way  further  information  on  duties  and  rights  under  Community  and  national  legislation 
directly  relating  to  the  execution  of  specific  payment  transactions,  such  as  reporting 
obligations, declarations and tax issues. This shall apply only in so far as the payment service 
provider has received, or could reasonably be expected to have received, notification of those 
duties and rights. 

Article 33 
Changes in contractual conditions 

1. 

2. 

Any change in the contractual conditions communicated to the payment service user 
pursuant  to  Article 31(1)  shall  be  proposed  by  the  payment  service  provider  in  the 
same  way  as  provided  for  in  Articles 30(1)  and 31(2)  and  not  less  than  one  month 
before the date of its proposed application.  

The  payment  service  provider  and  user  may  agree  that  the  user  is  to  be  deemed  to 
have  accepted  changes  in  the  conditions  if  he  does  not  notify  the  payment  service 
provider by the date of their entry into force that he does not accept them. 

Paragraph 1 shall not apply in the case of changes in the interest rates if the reference 
interest  rate  laid  down  for  their  calculation  in  the  framework  agreement  has 
fluctuated and the payment service provider has duly informed the payment service 
user  of  his  contractually  agreed  right  to  change  the  interest  rates  according  to  an 
agreed formula.  

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In such cases, any change in the interest rates may be applied immediately, provided 
that the payment service user is informed of the change at the earliest opportunity in 
the same way as provided for in Articles 30(1) and 31(2). 

Article 34 
Termination 

1. 

2. 

The termination of a framework contract which has been concluded for a period of 
12 months  or  more  or  for  an  indefinite  period  shall  be  free  of  charges  for  the 
payment service user. 

Fees  for  payment  services  charged  on  a  regular  basis  shall  be  payable  only 
proportionally up to the termination of the contract. If such fees are paid in advance, 
they shall be reimbursed proportionally. 

Save  where  the  payment  service  provider  and  the  payment  service  user  have 
explicitly agreed on a period of notice for the termination of a framework contract, 
framework contracts may be terminated immediately. 

The period of notice may not exceed one month. 

Article 35 
Information before execution of an individual payment transaction 

In the case of a payment transaction under a framework contract, a payment service provider 
shall, at the request of the payment service user for this specific transaction, provide explicit 
information  on  the  execution  time  and  the  commissions,  fees  and  charges  payable  to  the 
payment service provider.  

In cases covered by Article 58(2), a bona fide estimate of any deductions shall be provided in 
advance. 

Article 36 
Information to be provided to the payer subsequent to the execution 
of an individual payment transaction 

1. 

Subsequent to the execution of a payment transaction, the payment service provider 
shall provide the payer with at least the following information: 

(a) 

a  reference  enabling  the  payment  service  user  to  identify  each  payment 
transaction and, where appropriate, the information relating to the payee; 

(b) 

the full amount of the payment transaction transferred from the payer; 

(c) 

the  amount  of  any  fees  or  charges  for  the  payment  transaction  that  the  payer 
had  to  pay  to  his  payment  service  provider.  In  cases  where  an  aggregate  fee 
such as a merchant service charge or account management fee is charged, the 
information  shall  make  transparent  the  fees  and  charges  for  the  different 
service elements covered by the aggregate fee; 

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2. 

1. 

2. 

1. 

(d)  where  relevant,  the  exchange  rate  used  in  the  payment  transaction  if  it  is 

applied by the payer's payment service provider. 

It  may  be  a  condition  of  a  framework  contract  that  the  information  referred  to  in 
paragraph 1 is to be provided on a regular basis, with a specified frequency. In any 
case,  this  information  shall  be  supplied  in  the  same  way  as  provided  for  in 
Articles 30(1) and 31(2). 

Article 37 
Information to be provided to the payee after receipt of the funds 

Subsequent  to  making  the  funds  received  for  the  payee  available  to  the  latter,  the 
payment service provider shall provide the payee, in the same way as provided for in 
Articles 30(1) and 31(2), with at least the following information: 

(a) 

the reference of the payer; 

(b) 

appropriate information transferred by the payer with the payment and enabling 
the payee to identify the payment; 

(c) 

the full amount of the payment transaction transferred from the payer;  

(d) 

the  amount  of  any  commission,  fees  and  charges  applied  to  the  payment 
transaction payable by the payee to his payment service provider for receiving 
the payment; 

(e)  where  relevant,  the  exchange  rate  used  in  the  payment  transaction  if  it  was 

applied by the payee's payment service provider. 

In  cases  where  an  aggregate  fee  such  as  a  merchant  service  charge  or  account 
management  fee  is  charged,  the  information  provided  for  the  purposes  of  point  (d) 
shall make transparent the fees and charges for the different service elements covered 
by the aggregate fee. 

It  may  be  a  condition  of  a  framework  contract  that  the  information  referred  to  in 
paragraph 1 is to be provided on a regular basis, with a specified frequency. In any 
case,  this  information  shall  be  supplied  in  the  same  way  as  provided  for  in 
Articles 30(1) and 31(2). 

Article 38 
Micro payments 

By  way  of  derogation  from  Articles 29  to  33,  in  the  case  of  a  contract  concerning 
payments  where  no  individual  payment  can  exceed  EUR 50,  the  payment  service 
provider shall communicate to the payment service user in the manner provided for 
in Articles 30(1) and 31(2) only the main characteristics of the payment service to be 
provided, the way in which it can be used and all charges applicable. 

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2. 

3. 

1. 

2. 

1. 

2. 

The  payment  service  provider  shall  make  all  further  information  required  under 
Articles 29  to  33  and  applicable  to  the  payment  service  provided  available  to  the 
payment service user in an easily accessible manner. 

Following the execution of a micro payment the payment service provider shall, by 
way  of  derogation  from  Articles 36  and 37,  provide  the  payment  service  users 
involved  in  the  manner  provided  for  in  Articles 30(1)  and 31(2)  with  at  least  a 
reference enabling the payment service user to identify the payment transaction, the 
amount of the transaction and the fees applied to it. 

Chapter 3 
Common provisions 

Article 39 
Transaction currency and currency conversion 

Payments shall be made in the currency implicitly or explicitly agreed by the parties. 

Where a currency conversion service is offered prior to the initiation of the payment 
transaction and where that service is offered at the point of sale or by the payee, the 
party offering the service to the payer shall disclose to the payer all fees and charges 
as well as the reference exchange rate to be used for converting the transaction.  

The payer shall explicitly agree to the service on that basis. 

Article 40 
Additional charges 

Where, for the use of a given payment verification instrument, the payee requests a 
surcharge  or  offers  a  reduction,  agreement  shall  be  reached  between  the  payee  and 
the payer on those matters prior to the initiation of the payment transaction. 

Where,  for  the  use  of  a  given  payment  verification  instrument,  a  payment  service 
provider  or  a  third  party  requests  a  surcharge,  agreement  shall  be  reached  between 
the payment service user and the payment service provider on those matters prior to 
the initiation of the payment transaction. 

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TITLE IV 
Rights and obligations 
in relation to the provision and use of payment services 

Chapter 1 
Authorisation of payment transactions 

Article 41 
Consent 

Member States shall ensure that a payment transaction is considered to be authorised only if 
the  payer  has  consented  to  the  respective  payment  order  addressed  to  the  payment  service 
provider.  

Consent shall consist in an explicit authorisation for the payment service provider to effect a 
payment transaction or a series of transactions. 

In the absence of such consent, a payment transaction shall be considered to be unauthorised. 

A payment transaction may be authorised by the payer prior or subsequent to the execution of 
the payment transaction. 

Article 42 
Transmission of consent 

1. 

2. 

1. 

2. 

The payer may transmit his consent for the purposes of Article 41 using a payment 
verification instrument.  

The  consent  may  be  communicated  directly  to  his  payment  service  provider  or 
indirectly via the payee.  

The  procedure  for  transmitting  consent  shall  be  agreed  between  both  the  payment 
service provider and the payer in the manner laid down in Article 31(1)(a). 

Article 43 
Use of the payment verification instrument 

In cases where specific payment verification instruments are used for the purposes of 
transmitting consent, the payment service provider and the payment service user may 
agree on regular spending ceilings for payment services. 

If  agreed  in  the  framework  contract,  the  payment  service  provider  may  reserve  the 
right  to  block  the  use  of  a  payment  verification  instrument  even  within  the  agreed 
spending  ceiling  provided  that,  in  its  view,  the  spending  pattern  gives  rise  to  the 
suspicion of fraudulent use.  

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However,  the  payment  service  provider  may  block  the  payment  verification 
instrument only if he has previously made bona fide efforts to contact the holder of 
the payment verification instrument in order to verify whether fraud has been taking 
place. 

Article 44 
Record-keeping 

The  payment  service  provider  shall  keep  for  at  least  one  year  internal  records  in  order  for 
payment  transactions  to  be  traced  and  errors  to  be  rectified,  without  prejudice  to 
Directive 2005/…/EC or other relevant Community legislation. 

Article 45 
Unauthorised transactions 
and withdrawal of consent 

1. 

2. 

On  becoming  aware  of  any  unauthorised  transaction,  errors  or  other  irregularity  in 
the  payments  made  from  his  account  and  contained  in  the  information  received  in 
accordance  with  Article 36,  the  payer  shall  notify  his  payment  service  provider 
thereof without undue delay. 

In  the  case  of  a  series  of  transactions,  authorisation  may  be  withdrawn  and  any 
subsequent  payment  transaction  shall  be  considered  as  unauthorised  without 
prejudice to Article 56. 

Article 46 
Obligations on the payment service user 
in relation to payment verification instruments 

The payment service user shall meet the following obligations: 

(a) 

(b) 

to use a payment verification instrument in accordance with the terms governing the 
issuing and use of the instrument;  

to notify the payment service provider, or the entity specified by the latter, without 
undue  delay  on  becoming  aware  of  loss,  theft  or  misappropriation  of  the  payment 
verification instrument or of its unauthorised use. 

For  the  purposes  of  point  (a),  the  payment  service  user  shall,  in  particular,  as  soon  as  the 
payment service user receives a payment verification instrument, take all reasonable steps to 
keep its security features safe. 

Article 47 
Obligations on the payment service provider 
in relation to payment verification instruments 

The payment service provider shall meet the following obligations: 

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(a) 

(b) 

to  make  sure  that  the  personalised  security  features  of  a  payment  verification 
instrument  are  not  accessible  to  parties  other  than  the  holder  of  the  payment 
verification instrument; 

to refrain from sending an unsolicited payment verification instrument, except where 
a payment verification instrument already held by the payment service user is to be 
replaced  because  it  has  expired  or  because  of  the  need  to  add  or  change  security 
features ; 

(c) 

to  ensure  that  appropriate  means  are  available  at  all  times  to  enable  the  payment 
service user to make a notification pursuant to Article 46(b).  

For the purposes of point (c), the payment service provider shall provide the payment service 
user with the means to prove that he has made such a notification. 

Article 48 
Disputed authorisation 

1. 

2. 

3. 

4. 

Member States  shall  require  that,  where  a  payment  service  user  denies  having 
authorised  a  completed  payment  transaction,  the  payment  service  provider  is  to 
provide at least evidence that the payment transaction was authenticated, accurately 
recorded, entered in the accounts and not affected by a technical breakdown or some 
other deficiency. 

If,  on  production  of  the  evidence  required  under  paragraph 1,  the  payment  service 
user  continues  to  deny  having  authorised  the  payment  transaction,  he  shall  provide 
factual  information  or  elements  to  allow  the  presumption  that  he  could  not  have 
authorised the payment transaction and that he did not act fraudulently or with gross 
negligence with regard to the obligations incumbent upon him under Article 46(b).  

For the purposes of rebutting the presumption referred to in paragraph 2, the use of a 
payment verification instrument recorded by the payment service provider shall not, 
of  itself,  be  sufficient  to  establish  either  that  the  payment  was  authorised  by  the 
payment  service  user  or  that  the  payment  service  user  acted  fraudulently  or  with 
gross negligence with regard to his obligations under Article 46.  

Paragraphs 2 and 3 shall be without prejudice to the legal provisions concerning the 
evidential  status  of  handwritten  signatures  or  advanced  electronic  signatures  as 
defined in Directive 1999/93/EC of the European Parliament and of the Council30. 

Article 49 
Provider liability for losses 
in respect of unauthorised payment transactions 

Member States  shall  ensure  that,  in  the  case  of  an  unauthorised  payment  transaction,  the 
payment  service  provider  refunds  to  the  payment  service  user  forthwith  the  amount  of  the 

30 

Directive 1999/93/EC  of  the  European  Parliament  and  of  the  Council  of  13 December 1999  on  a 
Community framework for electronic signatures (OJ L 13, 19.1.2000, p. 12). 

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unauthorised payment transaction or, where applicable, restores the payment account that had 
been  debited  with  that  amount  to  the  situation  that  would  have  existed  if  the  unauthorised 
payment transaction had not taken place. 

Further financial compensation may be determined in accordance with the law applicable to 
the contract concluded between the payment service provider and the payment service user. 

1. 

2. 

3. 

4. 

1. 

2. 

Article 50 
User liability for losses 
in respect of unauthorised payment transactions 

The payment service user shall bear the loss, up to a maximum of EUR 150, resulting 
from the use of a lost or stolen payment verification instrument and occurring before 
he  has  fulfilled  his  obligation  to  notify  his  payment  service  provider  under 
Article 46(b).  

Member States  may  reduce  that  maximum  amount  further  provided  that  such 
reduction  does  not  apply  to  payment  service  providers  authorised  in  other 
Member States. 

The payment service user shall bear all the losses on unauthorised transactions if he 
incurred  them  by  acting  fraudulently  or  with  gross  negligence  with  regard  to  his 
obligations  under  Article 46.  In  such  cases,  the  maximum  amount  referred  to  in 
paragraph 1 shall not apply. 

The  payer  shall  not  bear  any  financial  consequences  resulting  from  use  of  the  lost, 
stolen or misappropriated payment verification instrument after the payment service 
provider has been notified of the loss or theft of that payment verification instrument, 
except where he has acted fraudulently. 

If the payment service provider does not provide adequate means for the notification 
at  all  times  of  a  lost,  stolen  or  misappropriated  payment  verification  instrument,  as 
required  under  Article 47(c),  the  payment  service  user  shall  not  be  liable  for  the 
financial  consequences  resulting  from  use  of  that  payment  verification  instrument, 
except where the payment service user has acted fraudulently. 

Article 51 
Micro-enterprises 
and electronic money 

Articles 49 and 50 of this Directive shall not apply where a payment service user is 
an  enterprise  exceeding  the  size  of  a  micro  enterprise  within  the  meaning  of 
Articles 1 and 2(1) and (3) of Title I of the Annex to Recommendation 2003/361/EC. 

Articles 48, 49 as well as 50(1) and (2) of this Directive shall not apply to electronic 
money within the meaning of Article 1(3)(b) of Directive 2000/46/EC. 

Article 50(3)  shall  apply  to  electronic  money  in  so  far  as  the  payment  service 
provider  is  technically  in  a  position  to  freeze  or  prevent  further  spending  of  the 
electronic money stored on an electronic device. 

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Article 52 
Refunds 

Member States  shall  ensure  that  a  payer  acting  in  good  faith  is  entitled  to  a  refund  of  an 
authorised payment transaction which has already been executed, if the following conditions 
are met: 

(a) 

(b) 

the authorisation did not specify the exact amount of the payment transaction or the 
identification of the payee when it was made; 

the  amount  of  the  transaction  executed  is  not  the  amount  that  a  reasonable  payer 
would expect if he were in that payer's position. 

However, for the purposes of point (b), the payer may not rely on currency exchange reasons 
if  the  reference  exchange  rate  agreed  with  his  payment  service  provider  in  accordance  with 
Articles 26(1)(c) and 31(1)(f) was applied. 

Article 53 
Requests for refunds 

1. 

2. 

3. 

Member States shall ensure that the payer shall request the refund, at the latest within 
four weeks of being informed of the payment transaction in question by the payment 
service provider. The request shall include factual elements relating to the conditions 
laid down in Article 52. 

Within  ten  business  days  of  receiving  a  request  for  a  refund,  the  payment  service 
provider  shall  either  refund  the  full  amount  of  the  payment  transaction  or  provide 
justification for refusing the refund, indicating the body to which the payer may refer 
the matter in accordance with Articles 72 to 75 if he does not accept the justification 
provided.  

No fees shall be payable by the payer in the event of a claim for a refund. 

Where the payment service user is an enterprise within the meaning of Article 1 of 
Title I of the Annex to Recommendation 2003/361/EC, the payment service provider 
may agree on time-limits other than those laid down in paragraphs 1 and 2.  

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Chapter 2 
Execution of a payment transaction 

SECTION 1 
PAYMENT ORDERS, FEES AND AMOUNTS TRANSFERRED 

Article 54 
Acceptance of payment orders 

1. 

Member States shall ensure that, in the case of a payment order initiated by a payer, 
or by or  through  a  payee, and covered by the authorisation of a payer, the point in 
time of acceptance occurs when the following three conditions are met: 

(i) 

the payment service provider has received the payment order; 

(ii) 

the  payment  service  provider  has  completed  authentication  of  the  order, 
including a possible check on the availability of funds;  

(iii) 

the  payment  service  provider  has  explicitly  or  implicitly  accepted  the 
obligation to execute the payment transaction ordered.  

The  point  in  time  of  acceptance  shall  not  be  later  than  the  point  in  time  when  the 
payment service provider starts to execute the payment transaction. 

In  the  case  of  electronically  initiated  payment  transactions,  the  payment  service 
provider  shall  inform  the  payment  service  user  of  acceptance  of  the  order  for 
execution. He shall do so without undue delay and, in any case, before the end of the 
next working day after the point in time of acceptance under paragraph 1.  

Article 55 
Refusal of payment orders 

Where the payment order is refused, the reasons for the refusal and, if possible, the 
procedure for correcting any factual mistakes that led to the refusal shall be notified 
to the payment service user by means of a communication agreed for that purpose by 
the parties. 

Notification  shall  be  made  without  undue  delay  and,  in  any  case,  within  three 
working days of the point in time of acceptance under Article 54(1). 

In  cases  where  all  the  conditions  set  out  in  the  payment  service  contract  in 
accordance  with  Article 31  are  met,  the  payer’s  payment  service  provider  shall  not 
refuse  to  execute  a  payment  order  which  has  been  initiated  through  a  payment 
service provider  other than the holder of the payer's  payment  account and  which is 
covered by the authorisation given by the payer. 

2. 

1. 

2. 

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Article 56 
Irrevocability of a payment order 

1. 

2. 

Without prejudice to Article 46, Member States shall ensure that the payment service 
user may not revoke a payment order after the time of its acceptance by the payer's 
payment  service  provider  for  payments  initiated  by  the  payer  or  by  the  payee's 
payment service provider for payments initiated by or through the payee. 

In  the  case  of  a  payment  order  to  be  executed  on  a  specific  date  in  the  future,  the 
payment  service  provider  and  the  payment  service  user  may  agree  on  a  date  of 
irrevocability that falls within the three working days preceding the point in time of 
acceptance for the order. 

Article 57 
Fees 

Where a payment transaction is carried out solely in the currency of a Member State and does 
not  involve  any  currency  exchanges  and  where  the  payment  service  providers  of  both  the 
payer and the payee are located in the Community, Member States shall require that any fees 
be levied directly on the payer and the payee by their respective payment service providers, 
and that they each bear their own fees.  

In the case of other payment transactions, the payer and the payee may, by mutual agreement, 
vary those requirements. 

Article 58 
Amounts transferred and amounts received 

1. 

2. 

Where the payment service providers both of the payer and of the payee are located 
in  the  Community  and  where  the  payment  transaction  is  carried  out  solely  in  the 
currency of a Member State, Member States shall require the payer's payment service 
provider to ensure that the full amount of the payment transaction is received by the 
payee. Intermediaries shall not deduct fees from the amount transferred.  

However, explicit agreements may be arranged between the payee and his payment 
service  provider  under  which  the  latter  may  deduct  his  own  fees  from  the  amount 
transferred before crediting it to the payee. 

Member States  shall,  in  either  of  the  following  situations,  require  the  payment 
service provider to give a bona fide estimate of any deductions to be envisaged  for 
the payment transaction: 

(a)  where  the  payment  service  providers  of  both  the  payer  and  the  payee  are 
located  in  the  Community,  but  the  payment  transaction  is  denominated,  in 
whole or in part, in a currency other than that of a Member State; 

(b)  where  the  payment  service  provider  of  either  the  payer  or  the  payee  is  not 

located in the Community. 

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SECTION 2 
EXECUTION TIME 

Article 59 
Scope 

This Section shall apply only if the payment service providers of both the payer and the payee 
are located in the Community. 

It shall not apply to payment transactions which are considered to be micro payments. 

1. 

2. 

1. 

2. 

Article 60 
Payment transactions initiated by the payer 

Member States  shall  require  the  payer’s  payment  service  provider  to  ensure  that, 
after the  point  in  time of acceptance, the amount ordered is credited to the payee’s 
payment account at the latest at the end of the first working day following the point 
in  time  of  acceptance.  However,  up  to  1 January 2010,  a  payer  and  his  payment 
service provider may agree on a period no longer than three days. 

Where  the  transaction  is  initiated  by  the  payer  and  includes  a  currency  conversion, 
the  payer  and  his  payment  service  provider  may  provide  otherwise  by  explicit 
agreement. 

Article 61 
Payment transactions initiated by or through the payee 

For  a  payment  transaction  initiated  by  or  through  the  payee,  Member States  shall 
require  the  payment  service  provider  to  ensure  that,  after  the  point  of  time  of 
acceptance,  the  amount  ordered  is  credited  to  the  payee’s  payment  account  at  the 
latest at the end of the first working day following the day on which the point in time 
of  acceptance  falls,  unless  otherwise  explicitly  agreed  between  the  payee  and  his 
payment service provider. 

If  the  payer’s  payment  service  provider  refuses  to  release  the  funds  which  are  the 
subject  of  the  payment  transaction,  the  payment  service  provider  shall,  within  the 
period  specified  in  paragraph 1,  inform  the  payee  accordingly  by  means  of  a 
communication agreed for that purpose by the parties.  

The payment service provider shall be deemed to have fulfilled its obligations under 
paragraph 1 of this Article and under Article 58. 

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Article 62 
Absence of payee payment account 
with the payment service provider 

Where  the  payee  does  not  have  a  payment  account  with  the  payment  service  provider,  the 
funds shall be made available to him within the period specified in Articles 60(1) and 61(1). 

Article 63 
Cash deposits 

In the case of a cash deposit by the payment service user into his own account, the payment 
service provider shall ensure that the amount is credited at the latest on the next working day 
after receipt of the funds. 

Article 64 
National payment transactions 

For purely national payment transactions, Member States may provide for shorter maximum 
execution times than those provided for in this Section. 

SECTION 3 
AVAILABILITY OF FUNDS 
AND LIABILITY 

Article 65 
Availability of funds on a payment account 

1. 

2. 

3. 

4. 

Member States  shall  ensure  that  the  payment  service  provider  of  the  payee  makes 
funds  available  to  the  payee  as  soon  as  those  funds  are  credited  to  the  payee’s 
payment account. 

No fees may be levied for making the funds available. 

The payment service provider of the payer shall cease to make funds available to the 
payer as soon as those funds are debited from the payer’s payment account. 

The credit value date for the  payee’s  payment account shall be  the point in time at 
which that account is credited. 

The  debit  value  date  for  the  payer’s  payment  account  shall  be  the  point  in  time  at 
which that account is debited. 

Paragraphs 1,  2 and 3  shall  be  without  prejudice  to  debits  effected  on  savings 
accounts  covered  by  explicit  agreements  regarding  the  use  of  funds  in  savings 
arrangements. 

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1. 

2. 

3. 

1. 

2. 

Article 66 
Incorrect unique identifiers 

If a payment order is executed in accordance with the unique identifier provided by 
the user, the payment order shall be deemed to be executed correctly with regard to 
the payee specified. Where the IBAN was specified as the unique identifier it should 
take precedence over the name of the payee, if it is provided additionally. However, 
the  payment  service  provider  should,  where  possible,  verify  the  consistency  of  the 
former with the latter. 

If  the  unique  identifier  provided  by  the  payment  service  user  is  incorrect,  the 
payment  service  provider  shall  not  be  liable  for  the  non-execution  or  defective 
execution of the transaction.  

However, the payment service provider shall make a bona fide effort to recover the 
funds involved in the payment transaction.  

If  the  payment  service  user  provides  information  additional  to  that  requested  under 
the first indent of Article 26(1)(a) or the first indent of Article 31(1)(b), the payment 
service  provider  shall  be  liable  only  for  the  execution  of  payment  transactions  in 
accordance with the unique identifier specified by the payment service user. 

Article 67 
Non-execution or defective execution 

After  the  point  in  time  of  acceptance  in  accordance  with  Article 54(1),  a  payment 
service provider shall be strictly liable for the non-execution or defective execution 
of a payment transaction made in accordance with Section 1. 

In addition, the payment service provider shall be strictly liable for any charges, and 
for  any  interest  charged  to  the  payment  service  user  as  a  consequence  of  the 
non-execution or defective execution of the payment transaction. 

If  the  payment  service  user  claims  that  a  payment  order  has  not  been  accurately 
executed,  the  payment  service  provider  shall  show,  without  prejudice  to  factual 
elements  produced  by  the  payment  service  user,  that  the  payment  order  was 
accurately recorded, executed and entered in the accounts. 

Article 68 
Transfers to third countries 

In cases where the payment service provider of the payee is not located in a Member State, 
the  payment  service  provider  of  the  payer  shall  be  liable  for  the  execution  of  the  payment 
transactions only until the funds reach the payee's payment service provider. 

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Article 69 
Additional financial compensation 

Any  financial  compensation  additional  to  that  provided  for  under  this  Section  shall  be 
determined in accordance with the national law applicable to the contract concluded between 
the payment service provider and the payment service user. 

Article 70 
No liability 

Liability under the first subparagraph of Articles 66(2), 67(1) and 68 shall not apply in cases 
of  force majeure  or  where  a  payment  service  provider  is  bound  by  other  legal  obligations 
expressly  covered  by  national  or  Community  legislation,  such  as  money  laundering  and 
anti-terrorist financing provisions. 

Chapter 3 
Data protection 

Article 71 
Exemption from, and restrictions on, the rules governing data protection 

Member States shall permit the processing of personal data by payment systems and payment 
service providers when this is necessary to safeguard the prevention, investigation, detection 
and prosecution of payment fraud. The processing of such personal data shall be carried out in 
accordance with Directive 95/46/EEC. 

Chapter 4 
Penalties 
and procedures for the settlement of disputes 

Article 72 
Complaints 

1. 

2. 

Member States shall ensure that procedures are set up which allow payment service 
users  and  other  interested  parties,  including  consumer  associations,  to  register 
complaints  with  regard  to  conflicts  arising  from  the  provisions  of  national  law 
implementing the provisions of the Directive. 

Where  appropriate,  complaints  shall  be  referred  to  the  competent  authorities 
responsible for the application of penalties under Article 73. Where appropriate, the 
reply to the complainant shall make reference to the out-of-court body set up under 
Article 75. 

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Article 73 
Penalties 

Member States  shall  lay  down  the  rules  on  penalties  applicable  to  infringements  of  the 
national provisions adopted pursuant to this Directive and shall take all measures necessary to 
ensure that they are implemented. The penalties provided for must be effective, proportionate 
and dissuasive. 

Member States  shall  notify  those  provisions  to  the  Commission  by  the  date  specified  in  the 
first paragraph of Article 85(1) at the latest and shall notify it without delay of any subsequent 
amendment affecting them. 

Article 74 
Competent authorities 

Member States shall take all the measures necessary to ensure that the complaints procedures 
and penalties provided for in Article 72(1) and the first paragraph of Article 73 respectively 
are  administered  by  the  authorities  empowered  to  ensure  compliance  with  the  provisions  of 
national law adopted pursuant to this Directive. 

Article 75 
Out-of-court redress 

1. 

2. 

Member States  shall  take  the  necessary  steps  to  set  up  and  promote  the  use  of 
appropriate  and  effective  out-of-court  complaints  and  redress  procedures  for  the 
out-of-court settlement of disputes between payment service users and their payment 
service  providers  for  all  disputes  concerning  rights  and  obligations  stemming  from 
this Directive, using existing bodies where appropriate. 

In the case of cross-border disputes, Member States shall make sure that these bodies 
cooperate actively in resolving them. 

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TITLE V 
Amendments and Payments Committee 

Article 76 
Amendments and updating 

In order to take account of technological and market developments in payment services and to 
ensure the uniform application of this Directive, the Commission may, in accordance with the 
procedure  referred  to  in  Article 77(2),  amend  the  list  of  activities  in  the  Annex  to  this 
Directive, in accordance with Articles 2 to 4. 

It  may,  in  accordance  with  the  procedure  referred  to  in  Article 77(2),  update  the  amounts 
specified  in  Articles 2(1),  21(1)(a),  38 and 50(1)  in  order  to  take  account  of  inflation  and 
significant market developments. 

Article 77 
Committee 

1. 

2. 

The  Commission  shall  be  assisted  by  a  Payments  Committee,  hereinafter  “the 
Committee”,  composed  of  representatives  of  the  Member  States  and  chaired  by  a 
representative of the Commission. 

Where  reference  is  made  to  this  paragraph  in  other  articles,  Articles 5  and 7  of 
Decision 1999/468/EC shall apply, having regard to Article 8 thereof.  

The  period  specified  in  Article 5(6)  of  Decision 1999/468/EC  shall  be  set  at  three 
months. 

3. 

The Committee shall adopt its rules of procedure. 

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TITLE VI 
Final provisions 

Article 78 
Full harmonisation, mutual recognition and mandatory nature 
of the Directive 

1. 

2. 

3. 

Without  prejudice  to  Articles 50(1),  64 and 80  in  so  far  as  this  Directive  contains 
harmonised  provisions,  Member  States  may  not  maintain  or  introduce  provisions 
other than those laid down in this Directive. 

When  exercising  the  options  granted  to  them  under  the  second  subparagraph  of 
Article 50(1)  or  Article 64  of  this  Directive,  Member States  may  not  restrict  the 
activities  of  payment  service  providers  authorised  in  another  Member State  and 
operating  within  their  territory  in  accordance  with  the  provisions  of  the  present 
Directive either by way of freedom of establishment or by way of freedom to provide 
services. 

The  Member States  shall  ensure  that  payment  service  providers  do  not  derogate,  to 
the  detriment  of  payment  service  users,  from  the  provisions  of  national  law 
implementing  or  corresponding  to  provisions  of  this  Directive  except  where 
explicitly provided for therein.  

However, payment service providers may decide to grant more favourable terms to 
payment service users. 

Article 79 
Report 

No  later  than  two  years  after  the  date  specified  in  the  first  paragraph  of  Article 85(1),  the 
Commission  shall  present  to  the  European  Parliament,  the  Council  and  the  European 
Economic  and  Social  Committee  and  the  European  Central  Bank  a  report  on  the 
implementation of this Directive. 

Article 80 
Transitional provision 

Without  prejudice  to  Directive  2005/60/EC  or  other  relevant  Community  legislation, 
Member States  shall  allow  persons,  including  financial  institutions  within  the  meaning  of 
Directive 2000/12/EC,  who  have  commenced  the  activities  of  payment  institutions,  as 
provided for in this Directive, in accordance with the national law in force before [the date of 
entry  into  force  of  this  Directive]  to  continue  those  activities  within  the  Member State 
concerned  for  not  more  than  18 months  after  the  date  set  out  in  the  first  paragraph  of 
Article 85(1). 

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Article 81 
Amendment of Directive 97/7/EC 

Article 8 of Directive 97/7/EC is deleted. 

Article 82 
Amendment of Directive 2000/12/EC 

In Article 19 of Directive 2000/12/EC, the following paragraph is added:  

“Without prejudice to the fifth indent of the first paragraph, in so far as financial institutions 
provide payment services within the meaning of Directive […/…] of the European Parliament 
and of the Council(*), they shall operate in accordance with the rules laid down in Title II of 
that Directive. 

(*) OJ L […], …, p. […].” 

Article 83 
Amendment of Directive 2002/65/EC 

Article 8 of Directive 2002/65/EC is deleted. 

Article 84 
Repeal 

Directive 97/5/EC  is  repealed  with  effect  from  the  date  specified  in  the  first  paragraph  of 
Article 85(1). 

Article 85 
Transposition 

1. 

Member States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions  necessary  to  comply  with  this  Directive  by  [12  months  after  the  date  of 
adoption] at the latest. They shall forthwith communicate to the Commission the text 
of  those  provisions  and  a  correlation  table  between  those  provisions  and  the 
provisions of this Directive.  

When  Member States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive.  

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Article 86 
Entry into force 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union.  

Article 87 
Addressees 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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ANNEX 
“PAYMENT SERVICES” UNDER ARTICLE 2(1) 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

Cash deposits on a payment account held either by the user's payment service provider 
or  by  another  payment  service  provider  as  well  as  all  the  operations  required  for 
operating a payment account. 

Cash  withdrawals  from  a  payment  account  held  either  by  the  user's  payment  service 
provider or by another payment service provider, as well as all the operations required 
for operating a payment account. 

Execution  of  payment  transactions,  including  transfer  of  funds,  where  the  funds  are 
held on deposit in a payment account with the user's payment service provider or with 
another payment service provider: 

– 

– 

– 

execution of direct debits, including one-off direct debits; 

execution of payment transactions through a payment card or a similar device; 

execution of credit transfers, including standing orders. 

Execution of payment transactions where the funds are covered by a credit line for a 
payment service user provided in accordance with Directive 98/7/EC of the European 
Parliament and of the Council amending Directive 87/102/EEC for the approximation 
of  the  laws,  regulations  and  administrative  provisions  of  the  Member States 
concerning consumer credit and other applicable Community legislation: 

– 

– 

– 

execution of direct debits, including one-off direct debits; 

execution of payment transactions through a payment card or a similar device; 

execution of credit transfers, including standing orders. 

Issuing of payment cards which allow the payment service user to transfer funds. 

Execution  of  payment  transactions,  including  transfer  of  funds,  where  the  electronic 
money within the meaning of Directive 2000/46/EC is issued by the payment service 
provider. 

(7)  Money  remittance  services  where  the  cash,  scriptural  money  or  electronic-money  is 
accepted by the payment service provider from the payment service user for the sole 
purpose of making a payment transaction and transferring the funds to the payee. 

(8) 

(9) 

Execution of payment transactions by any means of communication at a distance such 
as  mobile  telephones  or  other  digital  or  IT  devices  where  the  service  provider 
operating the telecommunication or IT system or network is facilitating the payment of 
goods or services that are not digital goods or electronic communication services and 
so are not provided through the device itself. 

Execution of payment transactions by any means of communication at a distance such 
as  mobile  telephones  or  other  digital  or  IT  devices  where  the  service  provider 
operating the telecommunication or IT system or network simply arranges a transfer of 
funds for the payment of digital goods or electronic communication services provided 
through the device, without any other intervention in the service provided. 

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