The Payment Services Directive (PSD2)

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What is the Payment Services Directive?

 

The European Directive (EU) 2015/2366 regulates the payment services in the European Market, widely known as «PSD2». Member States compliance date with said Directive is January 13^th, 2018.  

The purpose of the Directive is to provide the legal basis to a further development of a unified internal market for payments within the European Union (the «Union»), making them equally simple, effective, safe and transparent.

By harmonizing the PSD2 into national law, which is a successor to the existing Directive («PSD1»), a wider range of payment services is covered and regulated:

a)    Payment transactions in a currency other than the currency of a Member State, where both payment service providers (sending or receiving funds) are located within the Union, in regards to those parts executed within the Union and also

b)    Payment transactions in any currency where only one payment service provider is located within the Union, in regards those parts executed within the Union.

Additionally, PSD2 Directive allows the provision of payment services, both to consumers and businesses, from Companies/Organizations that are not necessarily Banking Institutions (Third-Party Providers – TPPs) such as:

Payment initiation service providers: They offer the possibility of initiating a payment, at the request of the payer, from an account held with another payment service provider (Banking Institution), while providing merchants with a verification for the initiation of the payment, in order for the goods to be released or for services to be provided without delay. A payment initiation service provider may be a Banking Institution or any other Organization/Company authorized for the provision of these services.

Account information service providers: An online service that provides aggregated information about one or more payment accounts held by the customer with various Banking Institutions, in order to obtain an overview of his financial position at any time. An account information service provider may be a Banking Institution or any other Organization/Company authorized for the provision of these services.

Account service payment service providers: Banking Institutions that provide and maintain payment accounts.

 

What is the impact on consumers?

 

The Directive aims, among others, to provide the same level of protection to consumers within European area.

The adoption of the Directive strengthens the rights of the Consumers, including the following:

• Reduction of the liability for any unauthorized payment instructions, from 150 euro to 50 euro
• More explicit information on payment services and payments/transactions.
• Faster payments
• Enhanced rights regarding refunds of direct credits in euro

More information on your rights as consumers can be found in the European Commission leaflet:

• European Commission information leaflet for consumers

 

Where does the Directive (PSD2) apply?

 

The PSD2 Directive applies to all EU member states as well as in Norway, Iceland and Liechtenstein.

For more information you may visit the European Union’s website:

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/consumer-finance-and-payments/payment-services/payment-services_en

The Republic of Cyprus has adopted the above mentioned Directive by the PSD2 2018 Law.

 

How does the Bank of Cyprus deal with the PSD?

 

Bank of Cyprus Public Company Ltd is fully compliant with the above Law (PSD2).

In order to comply with the above Law, Bank of Cyprus has duly amended the Supplementary Agreement and relative Terms and Conditions applied to the payment services provided, which you are required to read carefully.