The European Commission published on 23 July 2024 (IPR). In this we asked industry experts in Luxembourg for their key takeaways from the list of questions and answers. Here is what Legal advisor at Norton Rose Fulbright, highlighted for us.
Clarification on the types of payment accounts covered by IPR
“In line with the Payment Services Directive (PSD2), the IPR refers to PSD2 when defining a payment account. A payment account is an account held in the name of a payment service user and used to execute payment transactions,” explained Ciolino. “However, it was necessary to clarify whether the IPR provisions also apply when the beneficiary and the originator are the same person, for example when a customer makes a payment from their savings account at one bank to their current account at another bank.”
“In this situation, the question arises whether payment transactions can be carried out from the savings accounts. If payments can only be made via the current account linked to the savings account, the latter is not a payment account and therefore does not fall within the scope of the IPR.”
“Another question is whether trust accounts and pledge accounts are included in the IPR. The European Commission does not give a clear answer to this and stresses that the application of the IPR provision to trust accounts and pledge accounts must be assessed on a case-by-case basis (the designation of the account is not exhaustive).”
Blocking a transaction due to fraud
“Before processing an instant payment, the payment service provider (PSP) must take all necessary and appropriate steps to detect fraud,” said Ciolino.
“However, the conditions for refusing an instant transfer due to suspicion of fraud are not laid down in the IPR or in PSD2. PSD2 contains some rules for refusing to execute payment orders, but these rules do not apply to refusing an instant transfer due to suspicion of fraud. PSD2 also provides the possibility to block the use of a payment instrument due to suspicion of fraud, but only if this possibility has been agreed in the framework contract and only if the fraud concerns the use of a payment instrument and not if it concerns a payment transaction.”
“The possibility of blocking a transaction due to suspected fraud is currently being discussed as part of the revision of PSD2.”
Neutral approach between immediate and non-immediate payments and between all actors
“The European Commission makes it clear in the questions and answers that non-instant payments and instant payments, as well as credit institutions, PSPs and EMIs (electronic money institutions) must be treated equally,” Ciolino added.
“For example, the distinction between ‘account holder’ and ‘account holder’ (Article 5c(1), point (c) of the IPR) is clarified in the context of the requirement to protect client funds. The wording is intended to take into account transactions involving PSPs such as EMIs. An EMI would be a PSP that holds a payment account with a credit institution on behalf of several payees, where that credit institution is a PSP that holds that payment account.”
