The delivery of online retail goods and the rise of the instant payment solution has continuously accelerated over the past few years — services like Amazon Now will now deliver shipments within a few hours throughout the world. In most countries, traditional payment systems are still lagging behind and take days to process a standard credit transfer. Furthermore, banks are only processing payments on working days. To increase the efficiency of capital flows and to respond to rising customer expectations, new “instant” payment schemes are being developed in many countries worldwide.

In December 2016, the European Payments Council (EPC) presented its response to the mandate of the European Central Bank (ECB) to set up a rulebook for an instant payment solution. The SEPA Instant Credit Transfer scheme (SCT Inst) will be rolled out by participating banks at the end of 2017. Banks, as well as all other payment-related service providers, will need to decide how to position themselves within this new environment. EU member states will have until 13 January 2018 to implement it into national laws.

Key aspects

• Extension of regulated transactions: Scope of regulated transaction has been extended to transactions in any currency and ‘one leg out’ transactions.
• Stricter customer authentication: Payment Service Provider (PSP) are obliged to ensure a stricter customer authentication every time the payer accesses his payment account online, initiates electronic remote payment transactions or performs any other action through remote channels.
• Internal dispute resolution: Execution and application of adequate and effective complaint resolution procedures setting out maximum processing time for the resolution of customers’ complaints.
• Payment initiation services: PSD2 will regulate payment initiation service providers (PISPs) and the initiation of payments. In this context, PSPs domiciled in the EU are obliged to provide secure communication facilities, inform PISPs about payment initiation, and treat all initiated payments equally.
• Account information services: The access to the payment service user’s account has to be granted to third party providers for account information aggregation services. PSD2 regulates the duties of the account information service providers and those of the PSPs.

Our team includes payment experts who have ensured compliance of local, European and international PSPs with the Payment Services Directive as well as with SEPA regulations. If you would like to discuss any aspects of Payments and PSD2 in more detail, please don’t hesitate to get in touch with me, or your usual EY contact.