PSE Consulting’s most recent survey to assess the status of the EU’s Payment Services Directive (PSD) has highlighted that national regulators are frustrating the implementation of the Directive. By delaying the transposition of the Directive into local law, regulators are not allowing sufficient time for compliance and are failing to provide guidance on key areas of uncertainty.
Last week the UK was the first European nation to pass the PSD into national law. Within the context of this milestone, PSE has carried out a second survey of European payment players, designed to assess the current status of implementation and understand what is causing payment service providers concern.
The survey was completed by 37 senior personnel from across the EU and encompassed a wide range of institutions from banks to money remittance organisations and banking associations.
The clearest conclusion from the survey was the growing concern over implementation timelines. Institutions of all shapes and sizes are increasingly uncertain of their ability to be compliant by 1 November 2009, and they are now much less sure than they were in June last year. Not only do almost 25% of survey respondents think they are unlikely to be ready by November 2009, (in June 2008 98% of respondents were confident of being ready) but there are increasing concerns over smaller institutions’ ability to deliver.
On the positive side, PSE asked to what extent the current economic climate was affecting the implementation timetable. 85% responded that it would have little or no impact on their plans. In addition the majority of those interviewed have projects underway, with around 40% having completed an impact assessment and over a third with a budget allocated.
However, it appears a major delay is being created by local regulators. Almost 70% of those questioned believed that the legislation would not be available until after Q3 2009, leaving very little time for institutions to become compliant. Although regulators are providing support in areas such as guidance notes and input to drafting, only 20% of those questioned thought they would be given sufficient time to implement the PSD. In addition, almost half did not believe that their organisation had received sufficient clarification on key issues by the regulators.
Concern over the implementation timetable is also linked to other key unanswered questions. Scope and definition of transaction accounts and the treatment of exchange rates are still a major worry for over half of those who participated. Specifically updating merchant terms and conditions, merchant settlement times and the ability to correct errors on accounts are three of the most important and complex tasks that need to be actioned. It is vital that local regulators speed up the process of transposing the EU legislation into national law. Regulators appear to be focussing on other issues (such as interchange) and ignoring the implementation of a major piece of European harmonisation legislation.
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