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operate ATMs without licensing. This should encourage more provision of ATMs. Transparency on fees
will be required.
What does the initiative do to clarify the interaction between payments and General Data
Protection Regulation?
The proposal introduces clarifications and changes aimed at ensuring consistency with GDPR, namely
by:
clarifying that, for payment services providers, the permission to access and process personal
data of their customers is limited to the data necessary for the provision of the specific
payment services which were contracted with the customers;
strengthening the protection of payment service users' data in the context of Open Banking
services, by limiting the data which can be accessed by Third-Party Providers to the minimum
necessary for delivering the Payment Initiation or Account information services required by the
user (data minimisation) and by requiring banks to provide a “dashboard” allowing users to
visualize and manage all permissions that they grant to third-party providers for accessing
their payment account data;
clarifying that the processing of payment transactions may necessitate that payment service
providers be able to process personal data related to the parties of a payment transactions,
including personal data designated as “special categories of data” under GDPR.
Improvements to Open Banking
What is open banking, and what did PSD2 provide for in this area?
Open banking is the process by which account information service providers (AISPs) and payment
initiation service providers (PISPs) offer (or enable other parties to provide) value added services to
users by accessing – upon user request - their account data held by banks and other payment
account providers. Although open banking existed before PSD2, it took place in a largely unregulated
environment. PSD2 gave open banking a stable regulatory framework. It imposed an obligation on
banks to facilitate access to payments data for AISPs and PISPs via a secure interface. The value-
added services include, for example, services giving consumers a global view on their financial
situation and an analysis of their spending patterns, expenses and financial needs.
What are the changes being made to the functioning of open banking?
This initiative makes a number of targeted amendments to the open banking framework to improve
its functioning, while avoiding radical changes which might destabilise the market or generate
significant further implementation costs. New substantial requirements for dedicated data access
interfaces are proposed. A list of prohibited obstacles to data access is introduced. Banks will nolonger need to permanently maintain (unless where exempted) two data access interfaces (a
dedicated one and its “fall-back”). Contingency data access possibilities will remain available to open
banking providers in specific and temporary circumstances in order to secure their business
continuity in case the primary interface is down. Banks and other payment account providers will be
required to set up a “dashboard” allowing consumers of open banking services to see at a glance
what data access rights they have granted and to whom, and to withdraw access via this tool.
What is done to protect the business continuity of open banking providers?
The Commission grants utmost importance to the continuous access by open banking providers
(AISPs and PISPs) to the data which they need to service the clients having given them such data
access permission. The Commission considers that open banking data access and exchange is best
ensured through state-of-the-art dedicated interfaces. However, if a bank's open banking interface is
down, causing providers potential harmful data access disruption, and if the bank cannot rapidly
offer an effective alternative solution to the providers, they can then request their national authority
to be allowed to use another interface (such as the one that banks use for their customers) until the
provider's dedicated interface is restored to functioning. To ensure that there is no disruption in their
business, the open banking providers can use the alternative interface as long as the authorities do
not respond to their request to use it. The authority can set banks a deadline for this, with the
possibility of penalties if the bank fails to restore the dedicated interface by the deadline. Open
banking providers retain the right to claim damages from the bank for loss of business, in line with
civil law.
How do these changes relate to the Commission's proposal on financial data access?
The Commission is also presenting a legislative proposal on financial data access (FIDA), extending
the obligation to provide access to financial data beyond payment account data. The Commission
examined the possibility of transferring the legal framework for account information service providers
(AISPs) from PSD to the future FIDA framework. Although such a transfer would ultimately make
sense, given the nature of AISPs' business, there would be a significant risk of disruption and data
access rights interruptions for these market operators if such a transfer were carried out prematurely
i.e. before the existence of a “scheme”, which will be a pre-requisite for FIDA to take place. There is
currently no such scheme in the market. Creation of a private contractual scheme in the payments
sector (the SEPA Payment Account Access Scheme – SPAA) is currently being discussed by market
participants, which is however outside the FIDA framework. It is therefore deemed preferable to have
a staggered approach and provide for such transfer when the FIDA framework will be up and running
and when conditions for a smooth transfer are considered appropriate.
Competition and level playing field
What competition issues have been encountered by non-bank Payment Service Providers?
Payment institutions and e-money institutions (PIs and EMIs) have grown in numbers and
importance since the entry into force of PSD2. PIs and EMIs need to have an account with a
commercial bank to obtain a license. Offering payment services also requires having access to key
payment infrastructures that execute and settle payments. However, commercial banks often refuse
to open an account for them or close their existing bank account because of concerns over matters
such as anti-money laundering controls. Furthermore, the Settlement Finality Directive, as it stands,
prevents access by PIs and EMIs to payment infrastructures which have been designated under that
Directive, by not mentioning them as possible participants in such systems. This forces PIs and EMIs
to rely even more on commercial banks, establishing a structural dependency on banks and an
unlevel playing field, as banks are competitors of PIs and EMIs for the provision of payment services.
What does the initiative do to facilitate access of non-bank payment service providers to a
bank account?
Requirements on banks regarding bank account services to non-bank PSPs will be considerably
toughened, with a stronger requirement on banks to explain access refusal, covering also withdrawal
of service. Justification for refusal must be based on the specific situation of that PI, including
serious grounds to suspect illegal activities being pursued by or via the PI, or a business model or
risk profile which causes serious risks to the credit institution. The latter will be able to appeal to a
national authority against any decision of a bank not to open or to close an account. In addition to
commercial banks, central banks will also be allowed to provide account services to non-bank PSPs,
at their discretion.
How will payment institutions get better access to payment systems?
The proposal includes PIs as possible participants in designated payment systems. There will be
reinforced rules on the admission of PIs as participants in payment systems, with an obligation onpayment system operators to carry out appropriate risk assessments. Given the urgency of
introducing this indispensable level-playing-field measure, Member States are given 6 months to
transpose it in their national law.
Simplification and enforcement
What is changing as regards e-money institutions?
The
E-Money Directive
(EMD) contains rules on authorisation and supervision of e-money institutions
(EMIs). PSD2 contains rules on authorisation and supervision of payment institutions (PIs) and
establishes conditions for the relationship between all payment service providers (including EMIs)