May a PSP calculate its fraud rate at the level of individual brand, product or scheme?
The RTS do not specify whether a PSP may calculate its fraud rate at the level of individual brand, product or scheme.
Fraud rates may significantly vary on the basis of which brand, product or scheme is taken into account.
A sensible approach would be for PSPs to calculate their fraud rates for the application of the TRA exemption at the level of individual brand, product or scheme. PSPs would then apply the TRA exemption selectively, only to low-risk brands, products or schemes.
This would incentivize PSPs to promote the use of those brands, products and schemes with lower fraud levels.
No. In accordance with Article 19(1) of the Delegated Regulation (EU) 2018/389, the fraud rate should be calculated at the level of remote electronic card-based payments or remote electronic credit transfers and not split further into other categories or subcategories for the purpose of the calculation.
The calculation should be at payment service provider (legal entity) level.
This does not affect the ability of a Payment Service Provider to choose to apply the TRA exemption only at the level of specific low-risk brands, products and schemes, albeit based on the fraud level at the legal entity level as per the above, to promote the use of such brands, products and schemes with a lower fraud level, as the application of an exemption is not mandatory.