PSD SCOPE AND TIMING
PSD governs all payments with both endpoints in the EU and EEA, in Euro or any Member State currency. It was passed by the European Parliament in April 2007 and should have been transcribed into Member State Law with all provisions in effect by November 2009.
It introduces consistent scope and terms for the customer’s contract with the bank for payment services - and also limits the banks’ income (on fees, deductions and float). It permits the establishment of Payment Institutions, regulated but not subject to the full capital requirements of banks. This could be dangerous competition for the banks.
There are significant uncertainties around:
- Live date for the new conditions in each EU country
- What happens if a payment is moving from a jurisdiction that has not adopted PSD to one that has, and vice versa
- Whether PSD will be adopted consistently in every EU country after (a) it has been translated into all official EU languages (b) been subject to lobbying in each member state (c) transcribed into each member state’s law
- Whether banks even in the same country will adopt it consistently
PSD is also being introduced in two stages, with the second piece coming into effect in 2012, so the market will be in flux for the entire period.
