ERU, Alm.del - 2021-22 - Bilag 340: Orientering om høringssvar vedr. revision af andet betalingstjenestedirektiv (PSD2) og open finance, fra erhvervsministeren

Erhvervsudvalget 2021-22
ERU Alm.del Bilag 340
Offentligt

Commissioner Mairead McGuinnes

Directorate-General for Financial Stability, Financial Services and Capi-

tal Markets Union

European Commission

1049 Bruxelles

Belgium

MINISTER FOR INDUSTRY,

BUSINESS AND FINANCIAL

AFFAIRS

Response to the public consultations on PSD2 and open finance

Dear Commissioner McGuinnes,

Thank you for the opportunity to respond to the public consultations on

the review of PSD2 and on open finance. PSD2 introduced several new

legislative concepts, especially related to open banking and strong cus-

tomer authentication (SCA). These concepts brought about significant

and positive changes in the market, supporting innovation and security of

payments, but have also proven complex and time-consuming to imple-

ment. Therefore, we very much welcome your comprehensive approach

to the review of PSD2.

A revision of PSD2 should address inconsistencies and challenges

with the current framework

A revision should be based on thorough impact analysis and ensure add-

ed value. This would allow us to identify where there is a need for ad-

justments to address inconsistencies and challenges with the current

framework.

In our view, a revision should focus on achieving the following goals:

•

Consumer protection should be strong, logical and transparent,

meaning that payment services that seem similar to the consumer

should, as a starting point, entail similar consumer protection, and

where consumer protection has shown to be insufficient it should

be strengthened

•

Security requirements should be efficient and inclusive

to combat

fraud while avoiding inconvenience for users and financial exclu-

sion for vulnerable and non-tech savvy citizens

•

A level playing field between payment service providers should be

ensured

to achieve effective market access for all providers as

well as the best prices and the most innovative solutions for con-

sumers.

Finally, we see a need for a recovery and resolution framework for sig-

nificant payment institutions. In some cases, payments institutions have

assumed a critical size in the retail payments market, and a bankruptcy of

such institutions without a controlled wind-down could have significant

MINISTRY OF INDUSTRY,

BUSINESS AND FINANCIAL

AFFAIRS

Slotsholmsgade 10-12

DK-1216 Copenhagen K

Denmark

Tlf.

Fax

+45 33 92 33 50

+45 33 12 37 78

CVR-nr. 10092485

EAN nr. 5798000026001

[email protected]

www.em.dk

ERU, Alm.del - 2021-22 - Bilag 340: Orientering om høringssvar vedr. revision af andet betalingstjenestedirektiv (PSD2) og open finance, fra erhvervsministeren

consequences for the real economy. Such a framework could be estab-

lished either as part of a revised PSD2 or a separate legislative proposal.

For detailed explanations and exemplifications, please refer to Annex 1

to this letter.

Open finance should support innovation and data protection

We fully support the aim of improving and strengthening competition,

especially regarding open finance. However, before developing a poten-

tial open finance framework and taking new initiatives, learnings from

the open banking framework of PSD2 should be thoroughly evaluated.

When considering how an open finance framework could be developed,

we would like to highlight the following points:

•

A common standard for access interfaces

can ensure a harmo-

nized implementation across the market. To ensure flexibility, the

development of an actual standard could potentially best be car-

ried out by market participants with proper supervisory oversight,

while legislation should remain largely principle-based.

•

The Commission should continue considering how a

fair com-

mercial model for data sharing

can be developed to ensure that

data providers can cover costs and have an incentive to develop

well-functioning access interfaces.

•

There should be clear

limits to which types of data and functional-

ities should be made available to third parties

to ensure that

banks and other data providers have an incentive to continue in-

novation on a level playing-field.

•

Data sharing should be based on a

clearly informed basis from the

consumers perspective,

especially when third parties share data

with other parties without the consumer seeing it beforehand.

•

Before any initiative to further expand data-sharing requirements

are launched, it should be thoroughly considered how such initia-

tives will impact a

level playing field between different market

players and how to avoid concentration risks.

It should be con-

sidered if increased data sharing unintentionally could reinforce

the market power of large gatekeepers, e.g. so-called big techs.

The regulation should be more simple and coherent

Financial regulation has become increasingly extensive and complex.

Simultaneously, the interplay between payment services and regulation

both inside and outside financial services (e.g. GDPR, AMLD and the

upcoming MiCA) has increased the complexity further. This has given

rise to significant challenges when the various sets of rules have been

applied in practice.

ERU, Alm.del - 2021-22 - Bilag 340: Orientering om høringssvar vedr. revision af andet betalingstjenestedirektiv (PSD2) og open finance, fra erhvervsministeren

Additionally, the payments market is largely driven by technological

developments. Therefore, regulation must be as technologically neutral

as possible and leave sufficient flexibility for the adoption of new techno-

logical solutions.

For these reasons, the guiding principle for a revised PSD2 and an open

finance framework should be to focus on general and principle-based

regulation rather than detailed regulatory requirements.

I hope that you will find our considerations useful on the way forward on

PSD2 and open finance. I look forward to continue the fruitful discus-

sions on these important issues, including between our services. Should

you have any questions to the views outlined above or in the question-

naires, we remain at your disposal to elaborate and discuss further.

Yours sincerely,

Simon Kollerup

Minister for Industry, Business and Financial Affairs

Denmark

ERU, Alm.del - 2021-22 - Bilag 340: Orientering om høringssvar vedr. revision af andet betalingstjenestedirektiv (PSD2) og open finance, fra erhvervsministeren

Annex 1: Key areas for a revised framework for payment services

1. Consumer protection should be strong, logical and transparent

Strong and coherent consumer protection is fundamental for wide-

spread adoption of electronic financial services. It has been one of the

main drivers for the public’s broad adoption of new and innovative

solutions in Denmark. It should therefore be a guiding principle to

maintain and strengthen the consumer protection in PSD2.

Payment services that seem similar to the consumer should, as a start-

ing point, entail similar consumer protection. This will ensure that it is

logical and transparent to the consumer what protection applies.

For example, currently, consumer protection varies between credit

transfers and card payments. If credit transfers are increasingly used

for retail payments between consumers and merchants, e.g. through

payment initiation service providers (PISPs), the applicable consumer

protection should be similar to card payments since it will not be clear

to many consumers that different protection regimes apply.

Consumer protection in recurring payee-initiated card-payments

should also be strengthened and further aligned with traditional direct

debits. We have e.g. observed an increase in so-called subscription

scams using recurring payee-initiated card payments where consumers

are not aware that further payments will be made on an ongoing basis

after an initial payment for a good or service has taken place.

Finally, PSD2 should be merged with the electronic money directive

(EMD). In addition to a simplification of the overall payments services

framework, this could ensure a more consistent application of a com-

mon consumer protection regime for payment services. Further, the

interplay with MiCA, especially with regards to e-money tokens,

should be carefully considered. For the consumer, it will rarely be

clear whether a payment is carried out with “regular” funds from a

payment account, e-money from an e-money account or e-money to-

kens. The payment can seem similar for the consumer but different

consumer protection can apply, and this is neither consistent nor ap-

propriate.

2. Security requirements should be efficient and inclusive

The application of SCA has led to a significant decrease in fraud cas-

es. However, the same positive effects could maybe be achieved in a

less prescriptive way to avoid inconvenience for users and not least

lack of financial inclusion for vulnerable and non-tech savvy citizens.

ERU, Alm.del - 2021-22 - Bilag 340: Orientering om høringssvar vedr. revision af andet betalingstjenestedirektiv (PSD2) og open finance, fra erhvervsministeren

In some Member States, electronic payments can be substituted by

cash or paper-check payments. However, citizens in the most digitized

Member States increasingly rely solely on electronic payments. There-

fore, security requirements should be made more flexible so payment

service providers can better accommodate all user groups.

A more outcome-based approach (e.g. setting a maximum fraud level

allowed before SCA should be applied) would be more appropriate

and technologically neutral, and it would give payment service provid-

ers the largest possible space to innovate and provide consumer friend-

ly security solutions while still combatting fraud. Increased reliance on

transaction monitoring could be expanded to a larger section of pay-

ments where SCA would only be used for the most high-risk payment.

To achieve a more simple and principle based regulation, we should

avoid further detailed requirements on payment service providers to

address financial inclusion.

3. A level playing-field between payment service providers should

be ensured

Non-bank payment institutions and electronic money institutions play

an important role in providing innovation and competition in the mar-

ket. To fulfill this potential, the practical application of the initiatives

taken in PSD2 to increase market access for these actors should be

evaluated.

PSD2 article 36 on access to accounts maintained with a credit institu-

tion is an important tool to further the market access for payment insti-

tutions and electronic institutions. However, the provisions have given

rise to some concerns among credit institutions regarding the interplay

with AML legislation. Further guidance on the practical application is

needed to ensure a common practice across the EU, and to make sure

that the provision will have the intended competition-enhancing effect

without exposing credit institutions to unintended AML risks.

Also, the experience in the Danish market is that there is a need to make

PSD2 article 35 on access to payment systems more operational in prac-

tice to increase competition in the card acquiring market. This is especial-

ly relevant to make sure that national card networks dominated by a sin-

gle or a few card acquirers are exposed to more competition.

ERU, Alm.del - 2021-22 - Bilag 340: Orientering om høringssvar vedr. revision af andet betalingstjenestedirektiv (PSD2) og open finance, fra erhvervsministeren

4. A recovery and resolution framework for significant payment in-

stitutions

Payment institutions are increasing in size and play a pivotal role in

the market for payments between merchants and consumers. Capital

requirements and on-going supervision limit the risk of bankruptcy.

However, authorities have very few tools should this happen anyway,

with severe consequences for the real economy. For example, if non-

bank card acquirers declare bankruptcy without a controlled wind-

down, merchants would largely be unable to continue their business

until other acquirers have managed to absorb these customers. This

could take months in cases of the largest non-bank card acquirers.

For this reason, there is a need to introduce a recovery and resolution

framework for the most significant payment institutions. Inspiration

could be drawn from the BRRD-regime, but the different nature of

payment institutions should be thoroughly taken into consideration.

Also, the regime should be sufficiently flexible to allow for the often

very diverging business models of payment institutions.