Question ID:
Legal Act:
Directive 2015/2366/EU (PSD2)
Strong customer authentication and common and secure communication (incl. access)
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication
Article 1
Disclose name of institution / entity:
Name of institution / submitter:
European Cards Stakeholders Group (ECSG)
Country of incorporation / residence:
Type of submitter:
Industry association
Subject Matter:
Subsequent instances of a recurring card payment transaction, other than the first, initial one, are transactions initiated by the payee only. This is also the case for card instalment transactions.

Are the subsequent instance of card payment recurring transactions (other than the first, initial one) and of instalment transactions (again, subsequent to the initial one) transactions initiated by the payee only?

Background on the question:

The SEPA Cards Standardisation Volume of the European Cards Stakeholders Group defines for recurring card payment and for instalment card payments the initial transaction and the subsequent transactions.

The initial transactions in both cases are defined as “cardholder present” transactions. The cardholder will initiate the transaction. Cardholder Verification is required.

However, the subsequent transactions are defined as “cardholder not present” transactions. The merchant (“payee”) will initiate these instances without any interaction with the cardholder (“payer”) and a verification of the cardholder can’t be performed and is therefore not required.

These subsequent instances of the transaction are based on an initial mandate by the payer authorizing the payee to initiate the periodic payments and a pre-existing agreement between the payer and the payee for the provision of products or services. Their functioning is identical to that of direct debits.

Date of submission:
Published as Final Q&A:
Final Answer:

PSD2 distinguishes in point 3 of Annex I of PSD2 three types of electronic payment transactions, notably (a) direct debits, including one-off direct debits, (b) payment transactions through a payment card or a similar device, and (c) credit transfers including standing orders.

Card-based transactions imply an action of the payer in the initiation of the transaction, involving the use of a payment card or a similar device that has been issued to the payer and that is accepted as a payment method by the payee. Card-based transactions are therefore considered as payment transactions initiated by the payer through the payee. 

However, where the payer has given a mandate authorising the payee to initiate a transaction or a series of transactions through a particular payment instrument that is issued to be used by the payer to initiate the transactions, and where the mandate is based on an agreement between the payer and that payee for the provision of products or services, the (recurrent) transactions initiated by the payee thereafter on the basis of such a mandate can be qualified as payee initiated transactions, provided that these  payments are not dependent on a specific action of the payer to trigger the initiation of the payment by the payee.

Where the payer has not given a mandate to the payee, but to its own payment service provider or to initiate a transaction or a series of transactions through the use of a particular payment instrument (through the use of the card details attached to that payment instrument), the transactions cannot be equated to transactions that are only initiated by the payee.


This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General for Financial Stability, Financial services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.


Final Q&A
Answer prepared by:
Answer prepared by the European Commission because it is a matter of interpretation of Union law.