Response to consultation on draft Guidelines on the limited network exclusion under PSD2
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However, there is need for further clarification regarding e-commerce businesses:
1. Especially in e-commerce, the size of the geographical area for the provision of goods and services as defined in 2.2(a) cannot be a determining indicator. In contrast to brick-and-mortar shops, e-commerce companies are often selling cross-border within Europe allowing European consumers to profit from the Single Market. Using the geographical area as a determining factor would thus limit the free movement of goods and services without any justification as it would not protect consumers but would rather be detrimental to their interests and discourage cross-border sales. Moreover, this would conflict with the channel neutrality of the guidelines as stipulated in 2.3 and discriminate against online retailers who are, in contrast to brick-and-mortar stores, selling across national borders.
2. Online marketplaces are playing an important role as they lower the barrier for market access especially for SMEs by offering them an infrastructure ready to use and a higher reach. At the same time, they attract consumers allowing them to choose from a broad product range, find the products they are looking for and profit from a state-of-the-art website, which in turn attracts even more sellers to sell on the platform. Consequently, if such network of sellers would be limited to a certain number, marketplaces would lose their attractiveness for both sellers and consumers and thus their purpose. Moreover, despite the obligatory information offered by platforms, consumers do clearly not pay attention to from which sellers or from how many they are buying when purchasing goods on platforms having their own brand and applying uniform terms and conditions. In addition, the use of stored value cards in the platform / marketplace context is comparable to stored value cards issued by shopping centres who are redeemable in all shops within the centre and should thus be treated in an equal way. Therefore, the limited network exclusion should also apply to online marketplaces and platforms, which risks being ruled out by 2.1, 2.2 and 2.5. This would also help to ensure a level playing field between big players and small shops who are relying on platforms or who may even use these platforms as their only online sales channel.
3. In order to allow online platforms to profit from the limited network exclusion, the EBA should consider additional criteria determining if sellers selling via these marketplaces and platforms can be considered a limited network. We suggest that this should be the case for online platforms:
o having their own brand;
o having a uniform check-out experience for all sales;
o having uniform sales and return conditions for all sales irrespective of the seller;
o having uniform standards regarding the presentation of products and services, and administering these effectively;
o offering a customer service for all sales;
o offering consumer protection standards above the legal minimum required for online sales.
o And if the payment instrument may only be used on the online platform but not in other online or offline shops of the sellers selling via the platform.
Moreover, instead of using the number of users or the payment volume as a determining factor, we would recommend to take rather other factors such as consumer protection and the risk of money laundering into account as these are the ones that should be rather considered when deciding if a payment instrument is allowed as an unregulated product.
Q1. Do you have comments on Guideline 1 on the specific payment instruments under Article 3(k) of PSD2?
As a payment instrument is agreed between a payment service user and a payment service provider (cf. Art. 4(14) PSD2), stored value cards that can only be used to purchase goods from one merchant should not be in scope of the definition of payment instruments: When a merchant accepts payments for his goods or services, he or she does not provide a payment service to the user but only accepts the payment on his or her own behalf. However, some Member States seem to consider gift cards as payment instruments and such merchants as providers of payment services. These divergent interpretations are undermining the harmonised application of the PSD2 and are thus detrimental to the Single Market.Q2. Do you have comments on Guideline 2 on the limited network of service providers under Article 3(k)(i) of PSD2?
In view of an increasing omni-channel retail environment as retailers are integrating various sales channels into their business models, we welcome that the EBA clarified that a limited network can consist of brick-and-mortar stores only, web shops only or a combination of both (2.3) and that the EBA is aiming at a level playing field between the online and the offline world (2.4).However, there is need for further clarification regarding e-commerce businesses:
1. Especially in e-commerce, the size of the geographical area for the provision of goods and services as defined in 2.2(a) cannot be a determining indicator. In contrast to brick-and-mortar shops, e-commerce companies are often selling cross-border within Europe allowing European consumers to profit from the Single Market. Using the geographical area as a determining factor would thus limit the free movement of goods and services without any justification as it would not protect consumers but would rather be detrimental to their interests and discourage cross-border sales. Moreover, this would conflict with the channel neutrality of the guidelines as stipulated in 2.3 and discriminate against online retailers who are, in contrast to brick-and-mortar stores, selling across national borders.
2. Online marketplaces are playing an important role as they lower the barrier for market access especially for SMEs by offering them an infrastructure ready to use and a higher reach. At the same time, they attract consumers allowing them to choose from a broad product range, find the products they are looking for and profit from a state-of-the-art website, which in turn attracts even more sellers to sell on the platform. Consequently, if such network of sellers would be limited to a certain number, marketplaces would lose their attractiveness for both sellers and consumers and thus their purpose. Moreover, despite the obligatory information offered by platforms, consumers do clearly not pay attention to from which sellers or from how many they are buying when purchasing goods on platforms having their own brand and applying uniform terms and conditions. In addition, the use of stored value cards in the platform / marketplace context is comparable to stored value cards issued by shopping centres who are redeemable in all shops within the centre and should thus be treated in an equal way. Therefore, the limited network exclusion should also apply to online marketplaces and platforms, which risks being ruled out by 2.1, 2.2 and 2.5. This would also help to ensure a level playing field between big players and small shops who are relying on platforms or who may even use these platforms as their only online sales channel.
3. In order to allow online platforms to profit from the limited network exclusion, the EBA should consider additional criteria determining if sellers selling via these marketplaces and platforms can be considered a limited network. We suggest that this should be the case for online platforms:
o having their own brand;
o having a uniform check-out experience for all sales;
o having uniform sales and return conditions for all sales irrespective of the seller;
o having uniform standards regarding the presentation of products and services, and administering these effectively;
o offering a customer service for all sales;
o offering consumer protection standards above the legal minimum required for online sales.
o And if the payment instrument may only be used on the online platform but not in other online or offline shops of the sellers selling via the platform.
Q3. Do you have comments on Guideline 3 on the instruments used within the premises of the issuer under Article 3(k)(i) of PSD2?
The proposed restriction in Guideline 3 that instruments that can only be used within the premises of the issuer cannot be used online, but only in physical stores does not reflect today’s shopping reality. Retailers are more and more becoming omni-channel and integrate several sales channels into their business models. More and more consumers buy online but pick-up their orders in physical stores or have items from brick-and-mortar stores delivered to their homes and some physical shops are even just designed to showcase a limited number of products that consumers can then order online in the shop. Thus, this requires stored value cards to be redeemable across channels and we call on the EBA to revise Guideline 3 and delete this restriction.Q4. Do you have comments on Guideline 4 on the limited range of goods or services under Article 3(k)(ii) of PSD2?
It is important that the national competent authorities apply a harmonised approach in the Member States when deciding if the limited network exclusion applies or not. However, the suggested approach of determining a limited range of goods not by their functionality but by one leading good risks to lead to varying interpretations. As it will be easier to determine for the national competent authorities if a product is part of a category, it needs to be clarified that the leading product can also be a product category such as clothes and not only a single product such as trousers.Moreover, instead of using the number of users or the payment volume as a determining factor, we would recommend to take rather other factors such as consumer protection and the risk of money laundering into account as these are the ones that should be rather considered when deciding if a payment instrument is allowed as an unregulated product.