Response to consultation on separation of payment card schemes and processing entities under the IFR
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This section, and particularly Article 5 (Audit of financial information), applies to schemes and processing entities acting in the Acquirer to Issuer domain only. Members believe there would be no benefit in obliging processing entities not associated with Scheme activities to report financial information, be audited and have to publish their financial information.
Non-European schemes, which are not subject to the same rules, may develop new products outside of Europe using their own processing entities and create a competitive advantage in the development of specific solutions before deploying it across all processors.
Furthermore members believe that the objective of non discrimination between different processors could be achieved through the delivery of a basic service for card authorisation, clearing and settlement. We do not see any reason for processors and schemes having multiple standards (or variant of standards) or different structure of BIN (or IIN) table information that is not available to merchants and merchant’s PSP in a standardised manner. We believe that competition should instead be solely at the service provision level.
Regarding Section C Options considered
General:
I. Members are of the view that prohibiting use of shared services by payment card scheme and processing entity (option 4.2) is the correct and preferred approach.
Regarding Section D. Cost-Benefit Analysis and preferred options
II. Under recital 26, Members understand that defining a specific list of services that would fall under the scope of processing would be too static and need to be updated at regular intervals to adequately take market developments and innovations in card payment services into account, but would at the very least recommend the creation of a ‘minimum’ list of services which could be covered under the definition of processing (basic services).
1. Do you agree with the proposals outlined in Section 1 of the draft RTS regarding general provisions?
Yes2. Do you agree with the proposals outlined in Section 2 of the draft RTS regarding accounting?
Members feel that the Payment Services Provider in the ‘terminal to acquirer’ domain should be excluded from this section.This section, and particularly Article 5 (Audit of financial information), applies to schemes and processing entities acting in the Acquirer to Issuer domain only. Members believe there would be no benefit in obliging processing entities not associated with Scheme activities to report financial information, be audited and have to publish their financial information.
3. Do you agree with the proposals outlined in Section 3 of the draft RTS regarding organisation?
The intention of Article 10 (3) is understood although it only applies to European schemes which may act as a barrier to innovation for the European schemes and undermine their ability to innovate (recital 27).Non-European schemes, which are not subject to the same rules, may develop new products outside of Europe using their own processing entities and create a competitive advantage in the development of specific solutions before deploying it across all processors.
4. Do you agree with the proposals outlined in Section 4 of the draft RTS regarding independence of decision making process?
Yes5. Do you have any other comments?
members would like to reiterate that while within Chapter 5. subsection A and after indent b., the next paragraph refers to the merchant use of the services of a processing provider, the scope of the RTS ought to specifically deal with the ‘acquirer to issuer’ domain, together with entities acting as both Scheme and Processors.Furthermore members believe that the objective of non discrimination between different processors could be achieved through the delivery of a basic service for card authorisation, clearing and settlement. We do not see any reason for processors and schemes having multiple standards (or variant of standards) or different structure of BIN (or IIN) table information that is not available to merchants and merchant’s PSP in a standardised manner. We believe that competition should instead be solely at the service provision level.
Regarding Section C Options considered
General:
I. Members are of the view that prohibiting use of shared services by payment card scheme and processing entity (option 4.2) is the correct and preferred approach.
Regarding Section D. Cost-Benefit Analysis and preferred options
II. Under recital 26, Members understand that defining a specific list of services that would fall under the scope of processing would be too static and need to be updated at regular intervals to adequately take market developments and innovations in card payment services into account, but would at the very least recommend the creation of a ‘minimum’ list of services which could be covered under the definition of processing (basic services).