The Payment Services Directive
With the aim of achieving a Single Market in retail payment services that provides fair and open access to payments markets, and increases protection for consumers, the European Commission proposed the Payment Services Directive (PSD) in December 2005. The harmonised framework for payment service provision that will be established by the PSD will also provide the legal underpinning for the Single Euro Payments Area (SEPA). SEPA is a banking industry-led initiative that aims to develop a pan-European infrastructure for payment schemes, namely credit transfers, direct debits and card payments.
The PSD, which was adopted by the Council and European Parliament in November 2007 and published in the EU Official Journal on 5 December 2007, introduces a new EU-wide licensing regime for non-credit or e-money institutions, known under the Directive as 'payment institutions.' This will allow such providers to offer their services EU-wide on the basis of a licence obtained in one EU Member State. The PSD also harmonises conduct of business rules for all EU providers of payment services.
It is stipulated in the PSD that Member States must implement its provisions into national law by 1 November 2009. The Government proposes to implement the Directive in an effective, proportionate, and risk-based manner. By the means of a three-stage consultation process which is due to conclude in Autumn 2008, the Government continues to develop its approach to the legislation.
Media Links
- Press notice: 03/07/2006 Ed Balls launches consultation on Payment Services Directive
- Press notice: 29/10/2007 Kitty Ussher announces FSA as UK payment services regulator
- Press notice: 19/12/2007 Treasury launches consultation on the implementation of the Payment Services Directive
Documents and Publications
In July 2006 the Government sought stakeholders views on the UK's approach to negotiating the Payment Services Directive in the Council of Ministers and the European Parliament:
- The Payment Services Directive : a consultation document, July 2006 (PDF 449KB)
- The Payment Services Directive : a partial regulatory impact assessment, July 2006 (PDF 221KB)
- A summary of responses to the consultation on the Payment Services Directive, December 2006 (PDF 225KB)
- The Payment Services Directive : a revised regulatory impact assessment, December 2006 (PDF 221KB)
In December 2007 the Government consulted on how it proposed to implement the Directive in an effective, proportionate, and risk-based manner. It discusses the Government's proposed approach to implementing each Title of the Directive:
- The Implementation of the Payment Services Directive : a consultation document, December 2007 (PDF 531KB)
This spring the Government will be publishing a summary of responses to the policy consultation and this summer, it plans to consult on the draft PSD implementation legislation.
Related links
- Money Laundering Regulations 2007
- Regulation of Money Service Business
- Implementation of the Electronic Money Directive
External links
- The Payment Services Directive (PDF file on the EU Official Journal website, 225KB)
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