Time has elapsed for the incumbent EU Parliament to vote on the update of the Payment Services Directive (PSD). Parliament’s spokesperson, Jaume Duch Guillot, confirmed that the regulation related to EU payment laws, including interchange fees, is currently being discussed in economic and monetary affairs committees of the Parliament. Yet, the whole package is to be passed on to the newly elected Parliament, which will be formed following the EU Parliament elections in all member states on May 22-25. The current MEPs managed to conclude only the stage of tabling amendments to the draft of the report.
The chief objective of the PSD is to form a functioning European market for payments that would in the best case decrease costs of financial transactions for payment institutions and also customers. The first report that was tabled by Spain’s MEP, Pablo Zalba Bidegain, in November last year, questioned the proposal of the EU Commission to reduce interchange fees on credit card transactions and debit. The actual proposals to update the PSD emerged in 2007 and were published in July 2013.
The misfortune of the negotiations on the new PSD stems from the fact that the payment system is usually mentioned under the Single Euro Payments Area (SEPA) but the two concepts are in fact separate. SEPA was founded as a voluntary project of selected European banks including the European Payments Council, an advisory body, to define the way SEPA functions. The real obstacle to the creation of an EU-wide payment legislation, such as the PSD, lies in fact in culture and not regulatory considerations. Payment practices considerably differ throughout the Union, which seems to be by far the most problematic issue.
