Payment Services Directive

The Payment Services Directive (PSD) came into force on 1 November. It will make payments across Europe more efficient and more transparent. The directive will make cross-border payments as simple and secure as payments within the same country.

A standard payments process

The directive provides a regulatory framework for payments throughout the European Economic Area (EEA). It will apply to bank and non-bank payment service providers in the European Union (EU), Norway, Iceland and Liechtenstein.

From 1 November 2009, these providers will work to new regulations on account information and payment transactions in euro, sterling and other EU and EEA currencies. Cheques, drafts and other documents drawn on a PSP are not covered by the PSD.

Benefits for customers:

• Consistency – a standardised service for payments across Europe, supported by a common legal framework
• Improved protection – provide consistent rights and obligations for businesses and consumers making and receiving payments
• Clearer approach – through common understanding of each party’s rights and obligations
• Enhanced information – provided in the contract terms and conditions as well as increased transparency on the payments themselves

What happens next?

In the UK, the directive will be delivered by the Payment Services Regulations (2009). From the end of August throughout September customers will receive a Notice of Variation to the terms and conditions of affected products and services. These revisions will come into effect from 1 November.