The European Commission on 23 July 2024 published (IPR). In this , we asked industry experts in Luxembourg about their key takeaways from the list of Q&As. Here’s what , counsel at Norton Rose Fulbright, highlighted for us.
Clarification on the type of payment accounts in scope of the IPR
“Keeping a consistent approach with PSD2 [Payment Services Directive], the IPR refers to PSD2 for the definition of payment account. A payment account is an account held in the name of one payment service users which is used for the execution of payment transactions,” explained Ciolino. “However, clarification was needed as to whether the IPR provisions apply where the beneficiary and originator are the same person, for example, when a customer makes a payment from their savings account held by one bank to their current account held by another bank.”
“In this situation, the question is whether payment transactions can be made from the savings accounts. If payment can only be made through the current account that is linked to the savings account, the latter is not a payment account and so it is outside the scope of the IPR.”
Read also
“Another question is whether fiduciary accounts and pledged accounts are included in the IPR. No clear answer is given by the European Commission which stresses that the application of the IPR provision to fiduciary accounts and pledged accounts has to be assessed on a case-by-case basis (the name given to the account is not conclusive).”
Blocking a transaction for fraud
“Before processing an instant payment, the Payment Service Provider (PSP) must take all necessary and reasonable steps to detect fraud,” said Ciolino.
“However, the conditions for rejecting an instant payment due to suspicions of fraud are not set out in the IPR, or in PSD2. PSD2 sets out some rules relating to the refusal to execute payment orders, but those rules do not apply to the rejection of an instant credit transfer due to suspicions of fraud. PSD2 also provides the ability to block the use of a payment instrument on grounds of suspicion of fraud, but only if that ability is agreed to in the framework contract, and only where the fraud pertains to the use of a payment instrument and not where it pertains to a payment transaction.”
“The possibility of blocking a transaction on grounds of the suspicion of fraud is currently being discussed in the context of revision of PSD2.”
Neutral approach between instant and non-instant payments and between all the players
“The European Commission, in the Q&A, clearly states that the same level of treatment must be applied to a non-instant payment and an instant payment and to credit institutions, PSPs and EMIs [electronic money institution],” added Ciolino.
Read also
“For example, clarification is given on the difference between ‘maintaining an account’ and ‘holding an account’ (article5c(1), point (c) in the IPR) in the context of the requirement to safeguard client funds. The wording aims to cater for transactions where PSPs such as EMIs are involved. An EMI would be a PSP holding a payment account on behalf of multiple payees at a credit institution, with that credit institution being a PSP maintaining that payment account.”