Payments, E-Money And Crypto-Assets: Quarterly Legal And Regulatory Update For 1 January 2022 – 31 March 2022 – Technology

Ireland: Payments, E-Money And Crypto-Assets: Quarterly Legal And Regulatory Update For 1 January 2022 – 31 March 2022

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1. PAYMENTS

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1.1 EBA updates Single Rulebook Q&A on PSD2

During the period 1 January 2022 to 31 March 2022, the European Banking Authority (EBA) updated its Single Rulebook Questions and AnswersQ & As) publication on Directive (EU) 2015/2366Revised Payment Services Directive or PSD2) (the
Single Rulebook Q&A). The Q & As in respect of the following articles have been updated:

  • Article 2 – Scope;
  • Article 3 – Exclusions;
  • Article 4 – Definitions;
  • Article 5 – Applications for authorization;
  • Article 33 – Account information service providers;
  • Article 64 – Consent and withdrawal of consent;
  • Article 66 & 67 – Rules on access to payment account in the case of payment initiation services, and Rules on access to and use of payment account information in the case of account information services;
  • Article 80 – Irrevocability of a payment order; and
  • Article 97 – Authentication.

A copy of the Single Rulebook Q&A can be accessed here.

1.2 EBA publishes discussion paper on selected payment fraud data under PSD2

On 17 January 2022, the EBA published a discussion paper on its preliminary observations on selected payment fraud data under PSD2, as reported for by the industry for the years 2019 and 2020 (the
Paper).

The Paper presents the preliminary findings from the usable selected data relating to payment instruments (ie, credit transfers, card payments and cash withdrawals). In the Paper, the EBA also outlines patterns observed from the fraud data that are potentially inconclusive which require additional analyzes. The EBA has primarily focused its observations and patters on the most recent reporting period of H2 2020.

The Paper notes that cross border transactions have proportionately higher volumes of fraudulent transactions than compared to domestic payment transactions and that strong consumer authentication (SCA) safeguards are a useful tool in combatting fraudulent transactions as patterns show that payments authorized with SCA have lower fraud rates than payments authenticated without SCA.

Feedback on the Paper is being sought from external stakeholders to assist the EBA in its interpretation of fraud data for future reports. Comments may be submitted to the EBA on the Paper until 19 April 2022.

A copy of the Paper can be accessed here.

1.3 EBA issues final report and guidelines on limited network exclusion (LNE) under PSD2

On 24 February 2022, the EBA published its final report containing guidelines on the limited network exclusion (LNE) under PSD2 (the
Guidelines), following consultation of a draft report in July 2021.

The LNE exemption applies to specific payment instruments that can be used only in a limited way such as store cards, fuel cards, membership cards, public transport cards, parking ticketing, meal vouchers etc. The Guidelines provide information to assist national competent authorities (NCAs) in assessing the use of these specific payment instruments, the criteria and indicators to qualify under the LNE exemption and information on the notification requirements under Article 37 (2) of PSD2.

The EBA made certain changes, following its July consultation, including providing clarification on aspects of the assessment criteria and indicators, all of which are mandatory for the assessment by the NCA, and clarifying that the functional connection between goods and services should be based on a specific category of goods and services with a common purpose, rather than a leading good or service, as originally proposed in the consultation paper.

The Guidelines will apply from 1 June 2022 with an additional 3-month transitional period for issuers that already benefit from the exclusion to submit a new notification to their NCA.

A copy of the Guidelines can be accessed here.

To view the full article click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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