European online payments market a reality in two years


European Ministers in the Council officially adopted legislation aimed at further developing an EU-wide market for electronic payments. In two years’ time, all Member States must implement rules for emerging and innovative payments services, including internet and mobile payments. Ecommerce Europe has been strongly engaged in the discussions about these rules in the past years, and while it is pleased that there is now a decent framework in place, it is crucial for e-commerce businesses that the rules are implemented in a consistent and non-restrictive way.

New rules will increase trust in e-commerce

The Payment Services Directive 2 updates the original payment services directive from 2007, by including new methods for initiation of payments that have emerged in the field of e-commerce, and access to account services. Ecommerce Europe has asked policy makers to update the framework to cover these developments, as it will make both merchants and consumers feel more comfortable in trading online.

Framework for payment service providers

New payment methods usually form a software “bridge” between the website of the merchant and the online banking platform of the payer’s bank in order to initiate internet payments on the basis of a credit transfer. These services are now covered by the directive. They enable the payment initiation service provider (who never holds the user’s funds) to give an assurance to the payee that the funds necessary for a specific payment transaction are available on the customer’s account and that the payment has been initiated.

Access to the account services regulated

A regulatory regime to cover the activities of account information services is now also established. These services provide the payment service user, for example, with aggregated online information on payment accounts held with other payment service providers. This enables the payment service user to have an overview of his/her financial situation at any given moment, within a secure environment.

Security measures still a concern for conversion

At the same time, the directive promotes stronger security measures for internet payments and for the use of services provided by new market players. It enforces strong customer authentication to identify the client for each transaction, which can cause consumers to leave the check-out process early if the procedure to identify themselves becomes too complicated. The European Commission asked the European Banking Authority to issue common and secure standards on authentication and availability of funds for practical implementation of the rules.

Ecommerce Europe asks for workable solutions

Ecommerce Europe supports the expanded role the PSD2 gives to the European Banking Authority (EBA) in developing technical guidelines for implementation, as long as the standards are developed through consultation of relevant stakeholders as the guidelines will have great consequences for e-commerce businesses.Ecommerce Europe remains in close contact with European policy makers and the European Banking Authority through formal and informal consultation fora to ensure the voice of the online merchants is heard in the process of drafting the guidelines. To learn more about the possible consequences for the e-commerce sector, please click here.