A New Phase of Payments in Europe: the Impact of PSD2 on the Payments Industry
Computer and Telecommunications Law Review (2019) vol 25(2) 47 - 53
14 Pages Posted: 20 May 2019
Date Written: January 21, 2019
The creation of the European single economic market led to an unprecedented increase in economic activity between firms and individuals across the European Economic Area (EEA). This necessitated the development of a payment services and processing infrastructure to match the increasing activity and to cater to the challenges of a single market. Prior to this, there were differences in the payment services regime of EU countries with regard to efficiency, security, execution times and fees. In fact, at this time, national payment systems were faster compared with processing times between states. Owing to these challenges, the EU introduced a regulation to promote the adoption of the payment processing system and the introduction of mechanisms for the management of any associated risk. The article assesses the circumstances and value surrounding the Second Payment Services Directive (PSD2) with respect to the activities of the facilitators and the consumers of the services.
First, the article describes the payment services infrastructure and the elements making up the payment services regime. This part considers the payment services framework and examines the functions of payment facilitators/schemes making up the payment space. From the discussion in this section, it is clear that the regime was instituted to promote the emergence of a seamless payment service platform to facilitate an effective and efficient payment services regime. Secondly, the article discusses the development of the regime from PSD1 to PSD2. This part of the article briefly touches on the impact of the UK’s exit from the EU on the payment services regime. Thirdly, it assesses specific changes introduced by PSD2, discusses their effect and suggests ways of achieving a sustainable payment system for firms and customers. Specifically, the article considers the changes as it affects consumer protection, competition, market efficiency and security. Here, the article evaluates the impact of the activities of different parties with respect to the promotion of an efficient payment services regime. This article concludes by reiterating the improvements in payments services and highlights the opportunities for payment institutions and customers in ensuring the continued development and improvement of the payments services regime.
Keywords: Brexit; Consumer protection; EU law; Payment services, PSD, PSD2
JEL Classification: K00, K19
Suggested Citation: Suggested Citation