Payment Services Directive: A New Legal Framework for Payments in the European Union

Abstract: Payment Services Directive (PSD) was designed with the objective of constituting a new legal framework in the field of payments in the European Union. The Directive not only introduces several new solutions, but also transforms those already existing – reshaping the legal background to a large extent. It is clearly visible that the area of payments is a vastly complex part of the EU law. One should bear on mind that the PSD is interrelated with the Single Euro Payments Area (SEPA); while in some fields the PSD supplements the bank-led SEPA (f.i. enables the introduction of SEPA Direct Debits), at the same time has distinctly different scope. The legislator broadens the ambit to the whole EU/EEA (SEPA is limited to the Eurozone) and reshapes the SEPA project – a private sector initiative oriented on rationalization of costs – producing the PSD, a pro-consumer act of law. To make it even more interesting, SEPA was born as a reaction of the banking sector to an earlier act of the EU law – Regulation 2560/2001, which implicated higher costs for the European banks and was the reason why the above mentioned search for savings even started. The Regulation has been recently revised, with an aim to update some of its provisions, in order to facilitate the development of the new European payment system. The thesis presents what does the term “payments” actually mean, origins and categories of payments, the way in which they have been regulated before the PSD era (vide: Directive 97/5) and finally what are the novelties and modifications delivered by the PSD. The analysis of both those fundamental and those peculiar provisions was supplemented with the assessment of possible derogations (optional clauses) and potential incoherent national interpretations (vide: articles 73 and 86.3). The way payments have been regulated in the EU could be described as an amalgamate of different acts of various types, the Directive has the potential to organize the European payment system and at the same time it delivers a wide range of pro-consumer provisions. While some provisions will not be in force until year 2012, many others have already started to influence the way relations between PSPs and their users are regulated.