MEPs have agreed on new rules to level the playing field between banks and non-banks, make payments easier, cheaper and safer, and hold online platforms liable for payment fraud committed through their platform.
On Wednesday (14 February), lawmakers on the European Parliament’s economic affairs committee approved the proposal published in June 2023 by the European Commission to update and modernise payment rules by 39 votes to one, with three abstentions.
“Technology develops, and so do new fraud possibilities, so you have to react to that,” Marek Belka, the Polish centre-left MEP who is leading parliament’s work in the file, told a small group of journalists on Tuesday.
Belka argued that the parliament aims to stimulate competition between banks and non-banks such as fintechs, “but not at the cost of (lower) safety”.
The draft law would offer customers more protection against impersonation fraud, which occurs when someone poses as a trusted source to trick a victim into making a payment or providing personal and financial information.
The burden of addressing the fraud would be on banks rather than consumers, but also on online platforms such as social media giants or streaming services if the scam comes from their ads or via phone calls and messages through their platform.
“If the Facebooks of the world make money on hosting ads, accounts, they should take responsibility if those ads or accounts are fraudulent,” Belka said.
“We don’t want them to spy on everyone, but to react to information when they get some,” he added.
CCIA Europe, the lobby group representing big tech clients including Google or Meta, described the decision to extend liability to online platforms as unjustified, disproportionate and contrary to the aims of the Digital Services Act (DSA).
“Banks want to pass the buck and abandon their responsibility, dumping it on the very innovative players who already lead the fight against online fraud,” CCIA’s senior policy manager, Boniface de Champris, said.
Belka told reporters that this is not the typical ‘industry vs consumer’ file, referring to the multitude of stakeholders involved in the regulation, and insisting that the new provisions are harmonised with the DSA.
“Banks should not be the only ones responsible for consumers’ protection,” Belka added.
More transparency and better access to cash
The regulation seeks to tackle the fragmentation of payment services in the EU and proposes more transparency on fees and charges.
MEPs also want service providers to offer human assistance, and online platforms to contribute to education campaigns (and their costs) to raise consumer awareness of payment-related fraud.
The economics committee also approved a revised payment services directive aimed at ensuring better access to cash for consumers (especially in remote areas) and more open competition between payment service providers.
“We have doubled the cash limit for withdrawals of cash at retail stores [to €100],” Renew Europe MEP Ondřej Kovarík said after the vote. “Cash will be available and accessible, in particular for customers in rural areas with fewer ATMs or card payment facilities”.
Both files are expected to be voted on during the first plenary session in April, but the inter-institutional negotiations will have to wait until after the EU elections in June.
Elsewhere, MEPs adopted another regulation to make instant payments a reality for customers of banks and other payment service providers.
Under the new rules, service providers will have to ensure that the transfer of funds takes place within seconds, regardless of the day or hour, and for no more than the charges applied to non-instant transfers in euro.
The text has already been agreed with national governments and, once it enters into force, payment service providers will have nine months to receive instant transfers in euro and 18 months to send them.