Some questions and answers before new European rules for payment services will be applied. Among other things, merchants and service providers will no longer be allowed to charge additional fees to the customer if the receipt is paid by card.

In the EU a new European directive is being enforced on Saturday (and presumably a few weeks later, in Slovenia as well), which prohibits the customer to be charged a special fee simply because the receipt is paid by card, and not cash. This is far from being the only novelty, so we looked into what the new European rules for payment services bring.

The PSD2 directive has five basic purposes, as explained by the European Commission:

  • to contribute to a more coherent and more efficient European payment services market;
  • to equate the rules for classic and alternative payment service providers;
  • to ensure greater security of payment services;
  • to ensure better protection for European consumers;
  • to enable greater competition and thus reduce the price of payment services.

What are the main novelties that will affect everyone?

The renewed PSD2 Directive brings innovations to European consumers, companies and payment service providers. From the consumer point of view four of the novelties stand out:

  1. The PSD2 at EU level introduces a ban on card payment fees, which are now being charged by companies to final customers who pay by card instead of cash.
  2. The renewed Directive greatly reduces the amount to be paid by the cardholder in the event of card abuse – from 150 to 50 euros.
  3. If you are asked to provide a card at the reception desk of a hotel, so that they can charge you in case of unpaid expenses, you will now have to be informed of the amount of the charge, and will need to agree with it.
  4. Banks will be required to provide the information on your bank account or accounts (with your explicit consent) to alternative providers: either providers who offer payments via e-wallets, or providers of personal finance management applications (so that you will have the information on all of your account in one application)

When are the new rules coming into effect?

The European Directive was enforced on 12th of January 2016, but it stipulates that the new rules for the field of payment transactions in the EU will come into effect on 13th of January 2018. However, Slovenia is late in implementing the provisions of the directive, so the new rules will be introduced through the Law on Payment Services, Electronic Money and Payment Systems (ZPlaSSIED). This is still in the legislative process, so the new rules will be enforced later. As explained in the National Assembly, the second reading in the National Assembly is scheduled at a session starting on 22nd of January.

To which cards does the prohibition of additional fees apply?

The ban applies to all transactions by payment cards or online payments. With the ZPlaSSIED Act coming into effect, payment recipients will no longer be allowed to charge additional fees if the consumer pays the goods or service by card in Slovenia as well.

The ban will apply to all types of consumer card transactions , regardless of whether they are debit or credit cards, and regardless of the card scheme (such as visa, mastercard, diners). The ban will also apply to PayPal payments, as explained by the Bank of Slovenia and the Bank Association of Slovenia. The Bank Association of Slovenia adds that the changes apply to merchants based in the EU and for payments with consumer cards issued in the EU.

Let us add that the payment obligations in the EU apply for all currencies, not only for the euro. (PSD2 also imposes a large number of obligations, in particular the provision of information or transparency of costs in payment services to third countries if at least one of the providers is located in the EU.)

Does PSD2 eliminate cash withdrawal fees with ATM cards (at home and across the EU) or for online bank payments?

No, withdrawals at ATMs and bank counters are exempt from this ban on charging additional fees. Furthermore, PSD2 does not regulate fees for the provision of payment services in electronic banking.

Finance Live, 11th of January 2018, Albina Kenda