• Payment services: banks concerned over access to consumer data by third-party providers
• Interchange fees: low cap on card fees risks negative unintended consequences for consumers

The European Banking Federation notes that the European Parliament on Thursday approved the second Payment Services Directive and the Interchange fees Regulation. The EBF has supported the revision of the directive because banks believe this can promote better integration, encourage innovation and boost competition in the market for payment services in the European Union.

The EBF however has identified some important areas of concern and reiterates the need for further specific improvements.

"Banks believe it is important to update the existing directive because payment technologies continue to evolve rapidly and more competitors are emerging on the market," said Guido Ravoet, Chief Executive of the EBF. "But it is also clear that these improvements need to be appropriate and make the services more secure. Their impact needs to be carefully considered. We believe there is still a lot of work to be done and urge the Council to take this into account."

Some aspects on access to consumer on-line accounts by third-party providers remain to be addressed. The proposal that the parliament has endorsed allows third-party providers to access personal security credentials of consumers. As a result, the final outcome is an unclear legal framework without certainty about the rights and obligations of users, third-party providers and payment service providers.

Regarding the Interchange fees Regulation, the parliament voted in favor of lowering the cap that was initially proposed by the European Commission. The parliament approved a cap of 7 eurocents per debit card transaction, whereas the commission had proposed a cap of 0.2 percent. Consequently, all debit card transactions of 35 euros or more1 would be subject to an interchange fee significantly less than originally proposed. European banks already considered the initial proposal as problematic. In its current shape, the proposal would therefore have a very significant impact as banks may be forced to pass on payment costs directly to consumers in other ways.

European banks had also urged lawmakers to exclude commercial payment cards from interchange fee caps. The inclusion of these cards risks creating substantial, unintended negative consequences for businesses across Europe. Commercial and consumer cards represent two separate markets. Applying this cap also to commercial cards creates uncertainty for large and small businesses.

About the EBF: Launched in 1960, the European Banking Federation is the voice of the European banking sector from countries in the European Union and the European Free Trade Association. Members of the federation are 32 national banking associations. The EBF represents the interests of some 4,500 banks, large and small, wholesale and retail, local and cross-border financial institutions. Together these banks account for over 80 percent of the total assets and deposits and some 80 percent of all bank loans in the EU alone.

1 The average debit card transaction in the EU is 46,23 euros, according to an EBF calculation based on 2012 payment

With kind regards,

Audrey Redler
Communications Coordinator