The UK government has published details on how it plans to transpose the 2nd Payment Services Directive into UK law. We have summarised the key points which feature two particular important topics to take note of. Firstly, rules regarding how 3rd party access to customer accounts will be achieved during the transitional period between when PSD2 takes effect in Jan 2018 and when the RTS take effect at least 18 months later. Secondly, the extension of the merchant surcharging ban to cover all payments instruments. The UK government has decided to essentially go further than required under PSD2.
Guidance on 3rd party access rights& continued use of screen scraping
The government has confirmed that, from 13 January 2018, “ASPSPs will have to allow access to payment accounts for all registered or authorised TPPs, unless they have an objective reason (such as fraud) to deny access.”
Exactly what access rights TPPs are entitled to, depends on how long they have been in operation in the UK.
UK based PISPs that started to operate after 12th January 2016, will need to be authorised, and AISPs registered with the Financial Conduct Authority (FCA) before PSD2 takes effect on 13th January 2018 in order to continue operating. Applications for authorisation or registration will be able to be submitted to the FCA from 13th October 2017.
PISPs or AISPs operating in the UK prior to 12th January 2016 also known as the ‘live market’, can choose to continue operating on a non-regulated basis and continue screen scraping – until the new RTS apply. Once the RTS applies unregulated PISPs and AISPs will have to become authorised or registered to continue operating.
Prior to the RTS coming into effect, registered or authorised TPPs will be able to access
consumers’ accounts directly by utilising their login details (commonly known as ‘screen scraping’),
ASPSPs will only be able to stop the firms screen scraping during this period if there are “reasonably justified and duly evidenced reasons related to unauthorised or fraudulent access or payments”.
The future status of screen scraping is still be determined under the RTS published by the EBA.
Surcharging cap – blanket ban on surcharging
The UK government has decided to go further than required under PSD2 and intends to extend the surcharging ban to all retail payment instruments (See Q15 on p17).
This blanket ban on surcharging for all retail payment instruments includes “card-based payment instrument as defined in the European interchange fees Regulation”. Hence, this means all payments in the EEA made on credit cards issued under the 4 party model.
It does not include commercial cards as these are considered not to be “in competition with retail payment instruments”.
A ban in surcharging in line with the above would be sufficient under PSD2 rules. The UK however has gone further. Accordingly the blanket ban on surcharging it includes all other retail payment instruments. These include for example:
Cards issued under a 3party model such as AMEX and Diners. It also means all new PIS services and other non “card-based payment instrument or a payment service for credit transfers and direct debits”
There is some scope however for merchants to recover their card acceptance processing costs. The government says “A payee receiving a payment by means of a payment instrument must not charge the payer, in respect of such payment, a fee which exceeds the costs borne by the payee for the use of that specific payment instrument.” So whilst fixed amounts (such £1.50 per transaction) may be banned, it appears it may still be possible for merchants that for example accept AMEX cards to argue that their direct processing costs are 1.5% and pass this on to consumers in the form of surcharge.