Sunday, April 30, 2006

ECb to publish opinion on EU Payment Systems Directive (title 2 to be taken out)

TMCnet publishes a Dow Jones report explaining that the ECB will soon publish their opinion on the EU payment service directive (PSD). The ECB thinks that the PSD requires some amendments to avoid "diverging interpretations."

Despite numerous claims of both ECB and EU Commission that they are well aligned on all payment issues, it seems that there is a difference of opnion.

The ECB will soon urge the E.U. to make "explicitly clear that payment institutions may not use customers' funds during the limited time period that the funds are being transferred from the payer to the payee."

In addition, the ECB finds that the proposed directive is insufficiently clear as to
(i) what kind of activities payment institutions are allowed to perform and
(ii) whether they are allowed to hold balances with similar economic characteristics to deposits or e-money and grant credit financed by money received from the public.

The ECB also said that if the introduction of the directive were delayed, this could endanger the Single Euro Payment Area, which is planned for completion by 2010. So, rather than wait for the outcome of any prolonged negotiations, the E.U. should consider splitting the directive, "giving priority to adopting the parts necessary for a successful implementation of the SEPA".