Response to consultation on Guidelines aimed at standardisation of fee terminology for payment accounts in the EU
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As general remark, standardized price lists may be of limited value for consumers when comparing actual fees payable, as at least in several MS banks typically have dynamic and package pricing elements in addition to list prices. This means that the actual fees paid by customers cannot be compared simply by comparing price lists as they vary e.g. in relation to volume of other services used by the customer such as loans and savings.
A good example of comparison websites that takes into account customer profiles have been implemented in several Member States.
Flexibility should be left to competent authorities to consider the list as a whole to ensure the services listed are the most useful and meaningful for consumers. The Guidelines should allow competent authorities to take account of existing common terminology already implemented within Member States, and endeavour to maintain consistency with those terms.
In addition, as mentioned in question 1 point 2, the EBF welcomes the recognition in the Directive that it is “vital for consumers to be able to understand fees so that they can compare offers from different payment service providers and make informed decisions as to which payment account is most suitable for their needs”. For that reason, there should be therefore a requirement that the terminology used to describe services should be in plain language.
• Problem definition and baseline scenario (page 14): The EBF believes that the statements of EBA concerning the incompleteness of the EU internal market for payment account products are rather oversimplified. In many countries a payment account is a low-cost product, and consumers do not consider the potential cost saving as being large enough to actually switch from one AS PSP to another.
• The EBF agrees partly with the conclusion of the analysis and the selected options:
o (New option A): The practical implications of option A1 or A2 appear not entirely clear with the views to meet both objectives of reflecting national markets specificities and a certain standardization of the criteria based on the article 3 (2) of the directive. The EBF therefore believes it would be more appropriate to consider the following new option A:
“Deal primarily with the application of the criteria by competent authorities in order to derive the services that are most commonly used by consumers and / or generate the highest cost for consumers, and, when deemed relevant by competent authorities, to use other or additional criteria in order for them to take into account market specificities of their countries”.
The EBF believes that national list should indeed ‘primarily’ (by priority) take into account the criteria as set out by the Directive but that competent authorities should be able to use other criteria (and not ‘only exceptionally’ consider other criteria when market specificities justify it).
For instance, applying strictly policy option A1 could risk resulting in lists containing services which are irrelevant in some countries (e.g. cheques) and excluding some services that are important in others (e.g. e-invoicing).
The aim of the Directive is to make the list practically useful for the consumers and corresponds to their needs. PSPs should be able to present customers with a complete picture of applicable fees and charges at national level (including ones that are not subject to standardisation).
o (Option B2) Using available evidences and data from existing credible sources, avoiding collecting new data from firms (notably for competition reasons). Option B2 would allow competent authorities to decide for themselves what data is necessary for deciding which services merit inclusion in the provisional lists. Option B1 would create administrative burden.
o (Option C2) Relying on the standardised template proposed in Annex 6.2, in order to achieve homogeneity of the kind of collected features and information in different countries.
ADDITIONAL COMMENTS
The EBF understands that the EBA is launching consultations in order to give early indications to market participants about future requirements and to gather stakeholders’ views at an early stage of the process. However the EBF would like to emphasize that banks need several months to adapt their systems and processes to new legislation and routines. Banks will have to wait until the process of publication of the final list is completed at national level (as per art. 3(5) of the Directive within three months after the delegated act entered into force) to adapt to the new rules. If the directive is to be effectively implemented from 18 September 2016, EBA will need to present standardised terminology and presentation format well in advance, not by 18 September 2016 as set out in the directive and/or considering extending the deadline for implementation for the Member States to leave enough time for the industry to put in place the necessary measures.
Indeed, the EBF believes that the banking sector would have to face many requirements to ensure that the list is correctly and fully implemented. Banks will notably have to put in place an organisational structure for the implementation of the project, conduct a legal and business assessment of the new provisions, prepare specific implementation steps according to data availability and ensure IT requirements are fulfilled, program IT-Systems and test IT changes to ensure they are workable and are compliant. The EBF therefore considers that the lead-in time should be 12-18 months.
Question 2: Are there any additional requirements that you would suggest adding?
The EBF believes that some clarifications should be brought to the points developed above (see response to question 1).As general remark, standardized price lists may be of limited value for consumers when comparing actual fees payable, as at least in several MS banks typically have dynamic and package pricing elements in addition to list prices. This means that the actual fees paid by customers cannot be compared simply by comparing price lists as they vary e.g. in relation to volume of other services used by the customer such as loans and savings.
A good example of comparison websites that takes into account customer profiles have been implemented in several Member States.
Flexibility should be left to competent authorities to consider the list as a whole to ensure the services listed are the most useful and meaningful for consumers. The Guidelines should allow competent authorities to take account of existing common terminology already implemented within Member States, and endeavour to maintain consistency with those terms.
In addition, as mentioned in question 1 point 2, the EBF welcomes the recognition in the Directive that it is “vital for consumers to be able to understand fees so that they can compare offers from different payment service providers and make informed decisions as to which payment account is most suitable for their needs”. For that reason, there should be therefore a requirement that the terminology used to describe services should be in plain language.
Question 3: Do you agree with the analysis of the cost and benefit impact of the guidelines?
The EBF agrees partly with the result of the cost benefit analysis included in the Guidelines.• Problem definition and baseline scenario (page 14): The EBF believes that the statements of EBA concerning the incompleteness of the EU internal market for payment account products are rather oversimplified. In many countries a payment account is a low-cost product, and consumers do not consider the potential cost saving as being large enough to actually switch from one AS PSP to another.
• The EBF agrees partly with the conclusion of the analysis and the selected options:
o (New option A): The practical implications of option A1 or A2 appear not entirely clear with the views to meet both objectives of reflecting national markets specificities and a certain standardization of the criteria based on the article 3 (2) of the directive. The EBF therefore believes it would be more appropriate to consider the following new option A:
“Deal primarily with the application of the criteria by competent authorities in order to derive the services that are most commonly used by consumers and / or generate the highest cost for consumers, and, when deemed relevant by competent authorities, to use other or additional criteria in order for them to take into account market specificities of their countries”.
The EBF believes that national list should indeed ‘primarily’ (by priority) take into account the criteria as set out by the Directive but that competent authorities should be able to use other criteria (and not ‘only exceptionally’ consider other criteria when market specificities justify it).
For instance, applying strictly policy option A1 could risk resulting in lists containing services which are irrelevant in some countries (e.g. cheques) and excluding some services that are important in others (e.g. e-invoicing).
The aim of the Directive is to make the list practically useful for the consumers and corresponds to their needs. PSPs should be able to present customers with a complete picture of applicable fees and charges at national level (including ones that are not subject to standardisation).
o (Option B2) Using available evidences and data from existing credible sources, avoiding collecting new data from firms (notably for competition reasons). Option B2 would allow competent authorities to decide for themselves what data is necessary for deciding which services merit inclusion in the provisional lists. Option B1 would create administrative burden.
o (Option C2) Relying on the standardised template proposed in Annex 6.2, in order to achieve homogeneity of the kind of collected features and information in different countries.
Question 4: Please provide any evidence or data that would further inform the analysis of the likely cost and benefit impacts of the proposals.
No further information/data is available.ADDITIONAL COMMENTS
The EBF understands that the EBA is launching consultations in order to give early indications to market participants about future requirements and to gather stakeholders’ views at an early stage of the process. However the EBF would like to emphasize that banks need several months to adapt their systems and processes to new legislation and routines. Banks will have to wait until the process of publication of the final list is completed at national level (as per art. 3(5) of the Directive within three months after the delegated act entered into force) to adapt to the new rules. If the directive is to be effectively implemented from 18 September 2016, EBA will need to present standardised terminology and presentation format well in advance, not by 18 September 2016 as set out in the directive and/or considering extending the deadline for implementation for the Member States to leave enough time for the industry to put in place the necessary measures.
Indeed, the EBF believes that the banking sector would have to face many requirements to ensure that the list is correctly and fully implemented. Banks will notably have to put in place an organisational structure for the implementation of the project, conduct a legal and business assessment of the new provisions, prepare specific implementation steps according to data availability and ensure IT requirements are fulfilled, program IT-Systems and test IT changes to ensure they are workable and are compliant. The EBF therefore considers that the lead-in time should be 12-18 months.