Response to consultation on Technical Standards on standardised terminology and disclosure documents under the PAD
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• The EMA is of the view that the term “providing a debit card” and its definition “The account provider provides a payment card linked to the customer’s account. The amount of each transaction made using the card is taken directly and in full from the customer’s account.” creates a definition of debit card that is inconsistent with its definition in the Interchange Fee Regulation (Regulation (EU) 2015/751) (“IFR”). As the EBA proposed draft implies that the term debit card includes both a debit card and a prepaid card as defined in the IFR, we propose that the definition be amended to “The account provider provides a payment card linked to the customer’s account, which is not a payment card on which electronic money is stored. The amount of each transaction made using the card is taken directly and in full from the customer’s account.”
• Regarding the use of “Overdraft” in Ireland and “Arranged overdraft” in the UK, and “Credit transfer” in Ireland and “Sending money” in the UK, we suggest that, notwithstanding the differences between the national lists of Ireland and the UK, the same terms should be used for both countries not just because of the common language but also because Irish and UK citizens regularly travel between both countries, which share their only land border, so a common terminology would prevent confusion in the minds of consumer. This would better achieve the aims of the PAD in particular “the transparency and comparability of fees charged to consumers on their payment accounts” (Article 1(1) PAD). We propose that for both Ireland and the UK the term “Sending money” should be preferred to “Credit transfer” as it is a more intuitive phrase and less technical in its appearance, meaning that the ordinary consumer would understand the service immediately from the term alone.
Our comments on the FID template are as follows:
• The EBA’s proposed FID appears to be drafted solely with a view to presentation in paper format (and its electronic analogue the PDF format), as the template is specified as being presented in an A4 portrait format with Ariel font type and font size 11, with exceptions for the title ‘Fee Information Document’, which uses font size 16 in bold type; font size 14 in bold type for the headings, and font size 12 in bold for the sub-headings. Furthermore, the FID is required to “have its pages numbered”. However, under Article 4(1) PAD, the FID can be provided to the consumer in a durable medium other than paper, which could include electronic presentation for use with a mobile, tablet or other electronic device. A narrow paper-centric template could result in a FID that is not clear and is difficult to read, which would be a contravention of Article 4(2)(b) PAD. Therefore, the FID template should allow some flexibility to allow an electronic presentation to a consumer using a mobile, tablet or other electronic device.
• The proposed FID template does not have a field for the date of issue. This could lead to a situation where a consumer with multiple printouts (or stores) of FIDs for the same product from the same PSP would not be able to distinguish which FID is the most recent version. This could cause confusion for the consumer with regards to his/her liability for payment account fees. Therefore, the FID template should include a field for the date of issue of the FID.
• Our understanding of the FID template is that packaged services (which should be broken down into the constituent services) and services from the relevant national list must be included. We are of the view that, given the broad scope of standardised services, payment service providers should be permitted to include a description of the particular services offered. This would permit consumers to identify not only the similarities between payment products but also the differences, which would aid transparency and consumer decision-making and further the aims of the PAD.
Our comments on the SoF template are as follows:
• Like with the FID, the EBA’s draft specifications for the SoF appear to be built around presentation in paper format (and its electronic analogue the PDF format), as the template is specified as being presented in an A4 portrait format with Ariel font type and font size 11, with exceptions for the title ‘Statement of Fees’, which uses font size 16 in bold type; font size 14 in bold type for the headings, and font size 12 in bold for the sub-headings. Furthermore, the SoF is required to “have its pages numbered”. However, under Article 5(1) PAD, the SoF can be provided to the consumer by a means of communication agreed with the consumer, which could include an electronic presentation for use with a mobile, tablet or other electronic device, so a narrow paper-centric template could result in a SoF that is not clear and is difficult to read, which would be a contravention of Article 5(3)(a) PAD. Therefore, the SoF template specifications should be flexible to allow an electronic presentation to a consumer using a mobile, tablet or other electronic device.
• Our understanding of the SoF template is that packaged services (which should broken down into the constituent services) and services from the relevant national list must be included. We believe that, given the broad scope of standardised services, payment service providers should be permitted to include a description of the particular services offered. This would permit consumers to identify not only the similarities between payment products but also the differences, which would aid transparency and consumer decision making and further the aims of the PAD.
Question 1: Do you agree with the EBA’s decision to take a broad approach to defining ‘service’? Please explain your reasoning.
The EMA supports the EBA’s broad approach to defining ‘service’ as this approach is consistent with the Payment Accounts Directive (2014/92/EU) (“PAD”).Question 4: Do you consider the terms and definitions proposed by the EBA in the Annexes to the draft RTS, and the resultant provisions in the Recitals of the draft RTS, to be adequate for achieving the aims of the Directive of enhancing transparency and comparability? If not, please provide alternative terms and definitions and their underlying rationale.
Please note that while the EMA is comments are in the context of the proposed terms and definitions as set out in the English language, these comments should be extrapolated to make the necessary changes to the terms and definitions in the other official languages of the EU.• The EMA is of the view that the term “providing a debit card” and its definition “The account provider provides a payment card linked to the customer’s account. The amount of each transaction made using the card is taken directly and in full from the customer’s account.” creates a definition of debit card that is inconsistent with its definition in the Interchange Fee Regulation (Regulation (EU) 2015/751) (“IFR”). As the EBA proposed draft implies that the term debit card includes both a debit card and a prepaid card as defined in the IFR, we propose that the definition be amended to “The account provider provides a payment card linked to the customer’s account, which is not a payment card on which electronic money is stored. The amount of each transaction made using the card is taken directly and in full from the customer’s account.”
• Regarding the use of “Overdraft” in Ireland and “Arranged overdraft” in the UK, and “Credit transfer” in Ireland and “Sending money” in the UK, we suggest that, notwithstanding the differences between the national lists of Ireland and the UK, the same terms should be used for both countries not just because of the common language but also because Irish and UK citizens regularly travel between both countries, which share their only land border, so a common terminology would prevent confusion in the minds of consumer. This would better achieve the aims of the PAD in particular “the transparency and comparability of fees charged to consumers on their payment accounts” (Article 1(1) PAD). We propose that for both Ireland and the UK the term “Sending money” should be preferred to “Credit transfer” as it is a more intuitive phrase and less technical in its appearance, meaning that the ordinary consumer would understand the service immediately from the term alone.
Question 5: Do you consider the FID template that is being proposed in the draft ITS and its Annex to be suitable to achieve the aims of the Directive? Please explain your reasoning.
Please note that our comments should be understood in the context that the payment industry continues to undergo rapid change and consumer habits are adapting accordingly. We also note that many consumers use the Internet to obtain an overview of the market overview before they choose a payment services product. Therefore, we recommend that the approach to increase the level of information for consumers should reflect the reality of consumers’ use of the internet. Any other approach might discourage consumers from using FIDs to inform their decision making, thereby frustrating the aims of the PAD.Our comments on the FID template are as follows:
• The EBA’s proposed FID appears to be drafted solely with a view to presentation in paper format (and its electronic analogue the PDF format), as the template is specified as being presented in an A4 portrait format with Ariel font type and font size 11, with exceptions for the title ‘Fee Information Document’, which uses font size 16 in bold type; font size 14 in bold type for the headings, and font size 12 in bold for the sub-headings. Furthermore, the FID is required to “have its pages numbered”. However, under Article 4(1) PAD, the FID can be provided to the consumer in a durable medium other than paper, which could include electronic presentation for use with a mobile, tablet or other electronic device. A narrow paper-centric template could result in a FID that is not clear and is difficult to read, which would be a contravention of Article 4(2)(b) PAD. Therefore, the FID template should allow some flexibility to allow an electronic presentation to a consumer using a mobile, tablet or other electronic device.
• The proposed FID template does not have a field for the date of issue. This could lead to a situation where a consumer with multiple printouts (or stores) of FIDs for the same product from the same PSP would not be able to distinguish which FID is the most recent version. This could cause confusion for the consumer with regards to his/her liability for payment account fees. Therefore, the FID template should include a field for the date of issue of the FID.
• Our understanding of the FID template is that packaged services (which should be broken down into the constituent services) and services from the relevant national list must be included. We are of the view that, given the broad scope of standardised services, payment service providers should be permitted to include a description of the particular services offered. This would permit consumers to identify not only the similarities between payment products but also the differences, which would aid transparency and consumer decision-making and further the aims of the PAD.
Question 6: Do you consider the common symbol in the FID template that is being proposed in the draft ITS and its Annex suitable to achieve the aims of the Directive? Please explain your reasoning.
Similar to our comments to Question 5, the detailed specification of the common symbol only works in a paper-centric context. As argued in our comments to Question 5, the FID should also be clear and easy to read using characters of a readable size (as required by Article 4(2)(b) PAD) in any durable medium (including an electronic presentation of the FID). Given consumers’ increasing use of mobiles, tablets and other electronic devices to compare payment products on the internet and the increasing use of such products online via mobile apps or similar methods, the specification of the common symbol should fit within the framework of a revised FID template that is clear and easy to read using electronic devices.Question 9: Do you consider the SoF template that is being proposed in draft ITS and its Annex to be suitable to achieve the aims of the Directive? Please explain your reasoning.
Please note that our comments should be understood in the context that the payment industry continues to undergo rapid change and consumer habits are adapting accordingly. We also note that many consumers are increasingly using the internet to access their payment accounts. Therefore, we recommend that the approach towards increasing the level of information for consumers should reflect the reality of consumers’ use of the internet; any other approach would discourage consumers from using SoFs to inform their decision making and thereby frustrate the aims of the PAD.Our comments on the SoF template are as follows:
• Like with the FID, the EBA’s draft specifications for the SoF appear to be built around presentation in paper format (and its electronic analogue the PDF format), as the template is specified as being presented in an A4 portrait format with Ariel font type and font size 11, with exceptions for the title ‘Statement of Fees’, which uses font size 16 in bold type; font size 14 in bold type for the headings, and font size 12 in bold for the sub-headings. Furthermore, the SoF is required to “have its pages numbered”. However, under Article 5(1) PAD, the SoF can be provided to the consumer by a means of communication agreed with the consumer, which could include an electronic presentation for use with a mobile, tablet or other electronic device, so a narrow paper-centric template could result in a SoF that is not clear and is difficult to read, which would be a contravention of Article 5(3)(a) PAD. Therefore, the SoF template specifications should be flexible to allow an electronic presentation to a consumer using a mobile, tablet or other electronic device.
• Our understanding of the SoF template is that packaged services (which should broken down into the constituent services) and services from the relevant national list must be included. We believe that, given the broad scope of standardised services, payment service providers should be permitted to include a description of the particular services offered. This would permit consumers to identify not only the similarities between payment products but also the differences, which would aid transparency and consumer decision making and further the aims of the PAD.