the psp draft directive: « title iv » etienne wery attorney at law in brussels and paris ulys law...
TRANSCRIPT
The PSP draft directive:
« Title IV »
Etienne WERY
Attorney at law in Brussels and Paris
ULYS Law firm (http://www.ulys.net)
Who is protected?
A consumer : the whole Title IV applies (without prejudice to national measures implementing Directive 87/102/EC concerning consumer credit + granting of credit to consumers).
Not a consumer :
• Parties may decide that some articles doesn’t apply (40c(1), 41(3), 48, 50, 52, 53, 56, 67, 47a)
• Member states may decide that some articles doesn’t apply (75)
Micro enterprises: Member States may provide that provisions in this Title shall be applied to micro enterprises in the same way as to consumers
Low value payment instruments and electronic money: some derogations exists.
The architecture of Title IV
• Chapter 1: Authorisation of payment transactions
• Chapter 2: Execution of a payment transaction
• Chapter 3: Data protection
• Chapter 4: Complaints and out-of-court redress procedures for the settlement of disputes
Nearly 40 articles in 30 minutes! We can’t be comprehensive and will focus on some specific issues.
Authorisation: need for consent
The golden rule: a payment transaction is considered to be authorised only if the payer has consented to the payment order :
– prior to the execution of the transaction
– or after the execution of the transaction if agreed.
Sanction: In the absence of such consent, a payment transaction shall be considered to be unauthorised.
Authorisation: need for consent
The 2005 draft:
The « payement verification instrument » means « any personalised device(s) and/or set of procedures used by the payment service user in order to enable the payment service provider to authenticate a payment order. If it is not provided by the payment service provider, the payment service provider and the payment service user may agree on the use of any other instrument for the authentication of payment orders which may also serve other purposes »
The payer may transmit his consent for the purposes of Article 41 using a payment verification instrument.
Authorisation: need for consentThe 2007 draft:
Deletion of the reference to the « payement verification instrument » + deletion of the definition thereof.
The procedure for transmitting consent shall be agreed between the payer and his payment service provider.
A specific payment instrument may be used for the purposes of transmitting consent, but limits apply (including spending ceilings).
In this case and if agreed in the contract, PSP may, under conditions, control it and block its use:
– for objectively justified reasons related to the security of the payment instrument, the suspicion of unauthorized or fraudulent use of the payment instrument
– or, in the case of a payment instrument with a credit line, a significantly increased risk that the payer may be unable to fulfill his liability to pay.
Unauthorised or incorrectly executed transactions
On the user side:
The user shall obtain rectification from the PSP only if he notifies his PSP …
… without undue delay on becoming aware
… of any unauthorized or incorrectly executed transactions
… giving rise to a claim, including that under Article 67,
… and not later than 13 months after the debit date, unless, where applicable, the payment service provider has not provided or made available the information on that transaction in accordance with Title III.
Unauthorised or incorrectly executed transactions
On the PSP side:
The payer's PSP refunds to the payer
… immediately
… the amount of the unauthorized payment transaction
… and, where applicable, restores the debited payment account to the state which would have existed if the unauthorized payment transaction had not taken place.
Further financial compensation may be determined in accordance with the law applicable.
Unauthorised or incorrectly executed or incorrectly executed transactions
In some cases, the payer may be liable:
• the payer shall bear the loss up to a maximum of EUR 150, resulting from the use of a lost or stolen payment instrument or, if the payer has failed to keep the personalized security features safe from misappropriation of a payment instrument.
• The maximum liability disappears in case of fraudulent behavior, or by failing to fulfill the payer’s obligations under Article 46
• Member States may protect more the payer in cases where the payer has not acted fraudulently or with intent failed to fulfill his obligations under Article 46, taking into account especially the nature of the personalized security features of the payment instrument and the circumstances under which it was lost, stolen or misappropriated.
• The notification of the lost, stolen or misappropriated payment instrument changes the set of rules: the payer shall not bear any financial consequences after the notification.
Article 46 v. article 47
• The user must « use the payment instrument in accordance with the terms governing the issue and use of the payment instrument ».
• For this purpose, the user shall, in particular, as soon as he receives a payment instrument, take all reasonable steps to keep its personalized security features safe
• He shall also notify the payment service provider, or the entity specified by the latter, without undue delay on becoming aware of loss, theft or misappropriation of the payment instrument or of its unauthorized use.
Article 47 v. article 46
The PSP must notably:
• make sure that the personalized security features of a payment instrument are not accessible to parties other than the payment service user entitled to use the payment instrument
• ensure that appropriate means are available at all times to enable the payment service user to make a notification
• bear the risk of sending a payment instrument to the payer or of sending any personalized security features of it.
Evidence in case of unauthorised or incorrectly executed transaction
It is for the payment service provider to prove that the payment transaction was authenticated, accurately recorded, entered in the accounts and not affected by a technical breakdown or some other deficiency
The use of a payment instrument recorded by the payment service provider shall in itself not necessarily be sufficient to prove …
Execution time and value dateThe 2005 draft:
This Section shall apply only if the payment service providers of both the payer and the payee are located in the Community.
It shall not apply to payment transactions which are considered to be micro payments.
The 2007 draft:
This Section shall apply to:
(a) euro currency payment transactions;
(b) national payment transactions in the currency of the Member State concerned;
(c) payment transactions involving only one currency conversion between the euro and the currency of a non-euro Member State, provided that the required currency conversion is carried out in the Member State of the non-euro currency concerned and, in the case of cross-border transactions, the cross-border transfer takes place in euro.
This Section shall apply to other payment transactions, unless otherwise agreed between the payment service user and his payment service provider, with the exception of Article 64a which is not at the disposal of the parties (value date).
Payment transactions to a payment account
Payer's PSP:
• The delay starts at the point in time of receipt of the order
• 01/01/2012: D+1 (i.e., at the latest by the end of the next business day)
• Up to 31/12/2011: D+3 maximum
• These periods may be extended by a further business day for paper-initiated payment transactions.
Payee’s PSP:
• Must value date and make available the amount of the payment transaction to the payee’s payment account after it has received the funds
Cash placed on a payment account
Where a consumer:
• places cash on a payment account
• with that payment service provider
• in the currency of that payment account,
• the payment service provider shall ensure that the amount is made available and value dated immediately after the point of time of the receipt of the funds.
Where the payment service user is not a consumer,
the amount shall be made available and value dated at the latest on the next business day after the receipt of the funds.
National payment transaction
• For purely national payment transactions, Member States may provide for shorter maximum execution times.
Value date
The principle: « true » D+1 / D+3
On the payee’s side:
• the credit value date for the payee's payment account is no later than the business day at which the amount of the payment transaction is credited to the payee's payment service provider’s account
• and the amount of the payment transaction is at the payee’s disposal immediately after that amount is credited to the payee’s payment service provider’s account.
The principle: « true » D+1 / D+3
On the payer’s side:
• the debit value date for the payer's payment account is not earlier than the point in time at which the amount of the payment transaction is debited to that payment account
Liability in case of incorrect unique identifiers
• If a payment order is executed in accordance with the unique identifier, the payment order shall be deemed to have been executed correctly with regard to the payee specified in the unique identifier.
• If the unique identifier provided by the payment service user is incorrect, the payment service provider shall not be liable under Article 67 for non-execution or defective execution of the transaction.
• May it be liable under another legal ground?
• Compare with the 2005 draft: « where the IBAN was specified as the unique identifier it should take precedence over the name of the payee, if it is provided additionally. However, the payment service provider should, where possible, verify the consistency of the former with the latter ».
Liability in case of non/defective execution of an order initiated by the payer
The payer PSP is liable to the payer …
… unless he can prove that the payee’s payment service provider received the amount in which case, the payee’s PSP shall be liable to the payee for the correct execution of the payment transaction
Regardless of liability, upon request, the Payer’s PSP must make immediate efforts to trace the payment transaction and notify the payer of the outcome.
Consequences:
• Where the payer’s payment service provider is liable he shall without undue delay refund to the payer the amount of the non-executed or defective payment transaction and, where applicable, restore the debited payment account to the state which would have existed if the defective payment transaction had not taken place.
• Where the payee’s payment service provider is liable under the first subparagraph, he shall immediately place the amount of the payment transaction at the payee’s disposal and, where applicable, credit the corresponding amount to the payee’s payment account.
(Question: what about the damages for the payer, including its relationship with the payee?)
Liability in case of non/defective execution of an order initiated by/though the payee
• The payee PSP is liable to the payee
– for correct transmission of the payment order to the payment service provider of the payer
– for handling the payment transaction in accordance with its obligations
• When the payee’s PSP is not liable under the first and second sub-paragraphs, the payer’s PSP shall be liable to the payer
He shall, as applicable, refund to the payer the amount of the non-executed or defective payment transaction and restore the debited payment account to the state which would have existed if the defective payment transaction had not taken place, in each case without undue delay
• Regardless of liability, upon request, the Payee’s PSP must make immediate efforts to trace the payment transaction and notify the payee of the outcome.
