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REPORT (COM(2023)0366 – C90218/2023 – 2023/0209(COD))

On the proposal for a directive of the European Parliament and of the Council on payment services and electronic money services in the Internal Market amending Directive 98/26/EC and repealing Directives 2015/2366/EU and 2009/110/EC

A-9-2024-0046

Committee on Economic and Monetary Affairs · Rapporteur: Ondřej Kovařík

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Parliament's amended version of the Commission proposal for a directive on payment services and electronic money services in the Internal Market. It sets a single authorisation for payment institutions, including those issuing electronic money, with harmonised prudential rules, supervision and cross-border cooperation. It lays down initial capital requirements, own funds calculation methods, and rules on safeguarding users' funds, including the option to hold funds at a central bank. It requires registration for account information service providers and ATM deployers not servicing payment accounts, and exempts cash provision in retail stores without a purchase up to EUR 100 per withdrawal. It repeals Directives 2015/2366/EU and 2009/110/EC and amends Directive 98/26/EC, with transitional arrangements for existing payment and electronic money institutions.

Committee position. The Committee on Economic and Monetary Affairs proposes that Parliament adopt its first reading position as set out in the amendments, which establish a new directive on payment services and electronic money services, repealing Directives 2015/2366/EU and 2009/110/EC and amending Directive 98/26/EC.

Key points

  1. A single authorisation is required for payment institutions providing payment or electronic money services, granted by the home Member State and valid throughout the Union.
  2. Applicants must provide a programme of operations, business plan, governance and ICT arrangements, security policy, and a winding-up plan, among other documents.
  3. Payment institutions must hold initial capital of EUR 25 000, EUR 50 000, EUR 150 000 or EUR 350 000 depending on the services provided.
  4. Own funds must be calculated using Method A, B or C for payment services, and Method D for electronic money services, with competent authorities able to require adjustments of up to 20%.
  5. Funds received from users must be safeguarded by segregation or insurance, kept separate from the institution's own funds, and concentration risk must be avoided.
  6. Payment institutions may grant credit only as an ancillary service, must not take deposits, and must hold payment accounts used exclusively for payment transactions.
  7. Competent authorities must decide on authorisation within two months of receiving a complete application, and may withdraw authorisation on specified grounds.
  8. Member States must maintain public registers of payment institutions, and the EBA must operate a central register and a machine-readable list of payment initiation and account information service providers.
  9. Payment institutions must notify competent authorities about agents, distributors, branches and outsourcing, and remain fully liable for their acts.
  10. Account information service providers and ATM deployers not servicing payment accounts are subject to registration instead of authorisation, with lighter requirements.
  11. Retailers may provide cash in stores without a purchase, exempt from the directive, up to EUR 100 per withdrawal, with customer authentication and fee disclosure.
  12. The Commission must review the directive after five years, and the scope after three years from the entry into force of the Payment Services Regulation.

Who is affected

  • Payment institutions and electronic money institutions, which need authorisation and must meet prudential and conduct rules.
  • Account information service providers, which must register and hold professional indemnity insurance or EUR 50 000 initial capital.
  • ATM deployers not servicing payment accounts, which must register with competent authorities.
  • Retailers offering cash withdrawals without a purchase, which are exempt but must disclose fees and cap withdrawals at EUR 100.
  • Payment service users, whose funds must be safeguarded and who must be informed when agents, distributors or branches act on behalf of an institution.

Figures and deadlines

  • EUR 25 000 initial capital for payment institutions providing only money remittance.
  • EUR 50 000 initial capital for payment institutions providing payment initiation services, or as alternative to professional indemnity insurance for account information service providers.
  • EUR 150 000 initial capital for payment institutions providing any of the payment services in Annex I, points (1) to (4).
  • EUR 350 000 initial capital for payment institutions providing electronic money services.
  • EUR 100 cap per withdrawal for cash provided in retail stores without a purchase.
  • EUR 3 million maximum monthly average total value of payment transactions for exemption from authorisation.
  • EUR 5 million maximum average outstanding electronic money for exemption from authorisation.
  • EUR 1 million threshold for notification of activities under limited network exclusions.

Legal basis: Article 294(2) and Articles 53 and 114 of the Treaty on the Functioning of the European Union.