Treasury consults on PSD 2 implementation

Treasury is consulting on draft legislation to implement PSD 2 into UK law. The Government wants to finalise the legislation as early in 2017 as possible to give industry as much time as possible to make changes. The Government will, as usual, continue to work to implementation of all relevant EU measures and in principle, its usual approach to transposing measures is to use copy-out. In this case, however, it plans to build on the existing PSRs in the hope of reducing the costs of implementation for both businesses and consumers. It notes the rapid changes that continue to take place in the payments landscape and stresses the need for the regulators to have powers to respond to necessary challenges as they emerge.

The plan is to revoke the existing PSRs and replace them with a new set of regulations – even though many parts of the existing PSRs will be reproduced, this should make the entire set of regulations easier to use.

The consultation includes the draft new legislation and asks a number of questions on it, including:

  • on how firms plan to track the spending limits when making use of the electronic communications networks and services exemption, and whether, within a single transaction, it would be helpful if the exemption could be cascaded down through intermediaries;
  • on Treasury’s interpretation of the limited network and commercial agent exemption, and seeking views on what models that were previously exempt might now fall within the scope of regulation;
  • whether it is appropriate to make the Payment Systems Regulator the authority to monitor compliance of ATM operators with the requirements of their exemption;
  • whether respondents agree that safeguarding requirements should be able to be met by depositing funds with the Bank of England;
  • who is the appropriate enforcer for the rules on access to payment systems and payment account services;
  • whether the UK should continue to exercise the derogation for small payment institutions, subject to certain controls;
  • whether the right of termination should be extended to cover overdrawn current accounts;
  • whether the transparency and information requirements should continue to apply to transactions involving micro-enterprises;
  • whether the UK should keep the low-value instrument thresholds;
  • whether PSPs should have to provide monthly statements to payers and payees;
  • whether the ban on surcharging should be limited only to payment instruments regulated under the Interchange Fees Regulation; and
  • the approach to consent, authentication and communication, and the Treasury’s interpretation of key terms and the rights of Account Servicing Payment Service Providers, Account Information Service Providers and Payment Initiation Service Providers.

Consultation closes on 16 March.