24 February 2022
The European Banking Authority (EBA) published today its final Guidelines on the limited network exclusion under the Payment Service Directive (PSD2). These Guidelines clarify how national competent authorities should assess whether a network of service providers or a range of goods and services qualify as ‘limited’ and are, therefore, not subject to the Directive. Payment instruments that might benefit from this exclusion include store cards, fuel cards, public transport cards, and meal vouchers. The Guidelines aim at addressing significant inconsistencies on how this exclusion has in the past been applied across the EU, contributing to the Single Market for payment services in the EU and ensuring transparency for supervisors and customers.
The Guidelines introduce provisions, and where relevant, criteria and indicators, aimed at ensuring that payment instruments that can benefit from the exclusion are used in a limited way, thus reducing potential risks that may arise for the users of such instruments.
Following the responses received during the public consultation, the EBA further clarified certain aspects in relation to the assessment criteria and indicators, including their mandatory nature. The EBA also clarified that the functional connection between goods and services should be based on a specific category of goods and services with a common purpose, rather than a leading good or service, as originally proposed in the consultation paper.
In order to address potential concerns on circumvention of the requirements of PSD2 and to increase transparency for consumers who may not be aware that they do not benefit from the protection PSD2 provides to regulated services, the Guidelines also provide clarity on the provision of excluded services by regulated firms.
Finally, in order to ensure transparency on the provision of excluded services, the Guidelines provide clarity on the calculation of the payment transaction value thresholds, the submission of the related notifications to national competent authorities and the information to be covered in the description of the excluded activity on the national and EBA registers.
The Guidelines will apply as of 1 June 2022 with an additional 3-month transitional period for issuers that already benefit from the exclusion to submit a new notification to their national competent authority.
The EBA has developed these Guidelines in accordance with Article 16 of the EBA Regulation, which mandates the Authority to issue guidelines and recommendations addressed to national competent authorities or financial institutions with a view to establishing consistent, efficient and effective supervisory practices, including, where appropriate, to conduct open public consultations.
Article 3(k) of Directive (EU) 2015/2366 on payment services in the internal market (PSD2) specifies that the ‘Directive does not apply to services based on specific payment instruments that can be used only in a limited way, that meet specified conditions.
Article 37(2) of PSD2 prescribes that ‘Member States shall require that service providers carrying out either of the activities referred to in points (i) and (ii) of point (k) of Article 3 or carrying out both activities, for which the total value of payment transactions executed over the preceding 12 months exceeds the amount of EUR 1 million, send a notification to competent authorities containing a description of the services offered, specifying under which exclusion referred to in point (k)(i) and (ii) of Article 3 the activity is considered to be carried out.’