PSD2: Amendment to payment services regulations

Directive No. 2015/2366/EU, on payment services in the internal market, known under its abbreviation of PSD2, introduces a number of changes designed to enhance payment security. Internet payments will require secure customer authentication combining at least two of the following: access data; a code sent via SMS or generated via token – these methods are already being used relatively frequently – and biometrical data such as fingerprints or face recognition. A new account information service has also been introduced. This service will enable clients obtain information about all their payment accounts using a single application. The cardholder’s liability for unauthorised transactions resulting from the loss, theft or misappropriation of a payment card will be reduced from EUR 150 to EUR 50. Surcharging for card payments will be prohibited. The blocking of funds on payment accounts, typically used for making hotel reservations or car rentals, will also be regulated in a stricter manner.

Another change PSD2 introduces is the banks’ duty to inform clients about any changes to concluded contracts (including, for example, general terms of business or pricelists) not only via their internet banking application but also via email. This also ensues from the Court of Justice of the EU’s January judgment, according to which the delivery of a new wording of a contract into a client’s internet banking page does not suffice, as customers do not consider internet banking a regular communication channel and do not expect to receive such information in this manner. Consequently, it is necessary to use other, more appropriate channels to communicate such matters.

EU member states must implement PSD2 into their legal frameworks by 13 January 2018. A draft amendment to the Act on Payment Services has been in the chamber of deputies since spring. However, deputies refused to vote on the amendment in the first reading and passed a motion to amend it, changing it in such a way that the draft amendment no longer prescribed the above duty. The senate had to make an uneasy decision: pass the proposed law in its far-from-ideal wording or return it back to the chamber, which, however, would not have the time to discuss it before the end of the electoral term and the Czech Republic would thus miss the transposition deadline.

The amended payment services legislation must be interpreted in conformity with EU regulations, i.e. the transposed EU directive, and the Court of Justice of the EU’s case law. Banks should therefore adhere to the stricter interpretation, and the clients’ rights should not be affected. It is highly regrettable that whereas the majority of banks have already begun quite intensive and thorough preparations for these legislative changes, the legislator adopted an imperfect regulation only at the very last minute.