Response to consultation on Technical Standards on standardised terminology and disclosure documents under the PAD
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Overall, ABI considers that the draft Technical Standards on standardised terminology and disclosure documents are consistent with the PAD provisions and in line with the aim of enhancing payment accounts’ comparability for the benefit of consumers.
However, ABI would like to point out that for the sake of competitiveness of the banking industry, both at national and at European level, it is crucial to avoid products’ standardisation.
Moreover, we would like to suggest to take a coordinated approach with other legislative requirements (e.g. PSD 2).
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Question 1: Do you agree with the EBA’s decision to take a broad approach to defining ‘service’? Please explain your reasoning.
ABI considers that EBA’s decision to take a broad approach to defining ‘service’ is in line with the mandate - foreseen in Article 3 (4) of the PAD - for the EBA to set out the Union standardised terminology ‘for those services that are common to at least a majority of Member States’.
Since the PAD does not clarify which services specifically constitutes a ‘service’ in the context of the Directive and given the differences in services and related pricing structures that exist between payment services providers (PSPs) and between Member States (MS), it seems quite straightforward that - as a result - national authorities took different approaches in defining their respective provisional lists of the most representative services linked to a payment account and subject to a fee.
Accordingly, ABI agrees with the idea that - in such a heterogeneous context - the broad approach, that looks at the core of the definition, regardless of any specific types or sub-categories which may be referred to on some provisional lists, allows to identify a higher number of most common services compared to the narrow approach (although the narrow approach - by taking into account the specificities of each service – allows to distinguish the services at a more granular level). This in turn should ensure that the Directive’s aim of increasing comparability is achieved for the widest possible number of services.
However, ABI also believes that taking this option might pose a challenge in MS for their task of integrating, in the next step of the process, the final Union standardised terminology into their respective provisional lists, as required in Article 3 (5) of the Directive, because in several countries the integration might not be a straightforward task of replacing the national term by the standardised one. Although the ‘integration process’ is not part of the EBA mandate, ABI believes that it might be advisable - in order to ensure a certain degree of harmonization among MS - to provide MS with specific instructions as to how to integrate the Union standardised terminology into their respective provisional lists.
In particular, taking into consideration the assessment procedure used by the EBA (the 28 lists were assessed in order to identify which services were mentioned in at least 15 national lists), ABI agrees on the eight services proposed for standardised terms and definitions which appear to be those that are common to at least a majority of Member States, consistently with the PAD provisions.
Nevertheless, it is important to bear in mind that, given the differences in terms of variety of services linked to payment accounts among MS, the list identified by the EBA clearly represents a ‘compromise solution’. Moreover, we would like to underline that this list should be kept “open” and updated to consider possible future changes due to the “evolution” of services linked to payment accounts and their spread across MS.
• be drafted in clear, simple, and consumer-oriented language which avoids the use of legal terminology.
• use the third person.
• be short and direct to enable consumers to understand at a glance which service is being referred to. The definitions should be as brief as possible whilst also containing the most relevant information on the service. Crucially, the definitions should not seek to describe every aspect of the service but rather only its key features, in particular those which are important to consumers in differentiating the service from other similar ones.
• focus on the service itself rather than on defining precisely what is meant by the constituent elements of the service.
However, as regards the terms “providing a debit card” (“rilascio di una carta di debito”) and “providing a credit card” (“rilascio di una carta di credito”), we do not completely agree with the use of the word “providing”. We believe it could be better to use the terms “debit card” and “credit card”, as for the other services included in the table (“standing order”, “direct debit”, etc.), thus referring - in a broader sense - not only to the idea of providing a card, but also to the card’s functionalities.
However, we think it is necessary to include into the FID the “last update date”, for consumers to know that the economic conditions displayed in the document refer to a specific moment/period.
However, we suggest another option: the symbol constituted of the acronyms of the Fee Information Document with EU acronyms and a text next to the symbol indicating “Standardised EU information sheet” to facilitate the distinction between the EU document and the national one (e.g. EU-FID).
However, it must be noted that such a simplification/standardisation of the template does not allow PSPs to fully represent the specificities (in terms of pricing structures) of the payment accounts offered to consumers.
Moreover, ABI believes that some clarifications should be made with regard to the following points (here we refer to both the FID template and the FID template instructions):
1. In the proposed instructions for the completion of the FID template, it is not clear where and how the PSPs can describe and display information regarding (possible) ‘promotional offers’ and/or ‘discounts’ linked to the payment account. In many cases, fees vary during the year due to contractual terms and conditions (conditions that might not be included directly in the FID – e.g. the account fees change due to the amount of investments held by the client).
ABI believes that in order to allow consumers to make informed choices it is crucial to provide them with the necessary information. In this respect, it could be useful to include in the FID an ‘additional information’ box where PSPs can explain/underline the product specificities.
2. In the main text of the Consultation Paper (point. 71, pag.22), EBA indicates that - based on the PAD definition of ‘fees’ (“all charges and penalties, if any, payable by the consumer to the PSP for or in relation to services linked to a payment account”) - taxes charged by the PSP on behalf of tax authorities will have to be included in the amount disclosed.
ABI believes that:
- it should be explicitly mentioned in the FID that taxes are included;
- it is necessary to provide consumers with the related fee/tax structure details, otherwise the information could be misleading.
In this respect, therefore, ABI suggests to define a unique criterion at EU level for the PSPs to display this kind of information in the FID in a clear and easy-to-read way, also with the aim of assuring a level playing field and cross-border coherence. This is particularly true with reference to taxes, in order to take into account the specific rules provided by national tax legislation (e.g. exemptions/exceptions).
3. According to the PAD, PSPs shall display in the FID the comprehensive cost indicator summarising the overall annual cost of the payment account, where required by national provisions. However, it must be noted that - since the method to calculate the comprehensive cost indicator is not the same across Europe - the indicator used in country A may not be compared with the indicator used in country B. Hence, ABI considers that it is advisable to include a short explanation (or a disclaimer) in the FID, next to the comprehensive cost indicator table, for consumers to understand that such indicators represent an estimate of the payment account cost and that methodologies differ across Europe.
In order to make the instructions even clearer, ABI believes it is advisable to specify that the FID will display the fees for all services contained in the list of the most representative services linked to a payment account at national level (which in turn means all the services included in the final list developed by the competent authorities). Similarly, it could be useful to explain how the services included in the final list will be divided into the 5 categories identified by the EBA (‘general account services’, ‘payments’, ‘card and cash’, ‘overdraft and related services’, ‘other services’).
Regarding Article 4 of the draft ITS, we note that the heading of the article refers to ‘account provider’ while the “body” refers to PSP. ABI believes that for the sake of clarity it might be better to use the same terminology both in the title and in the body of the article.
With reference to Article 8 (2), stating that “all services covered by the package, regardless of whether they are included in the final national list of most representative services linked to a payment account referred to in Article 3 (5) of the Directive 2014/92/EU, shall be listed in the section of the table on general account service” it is not clear whether the services to be considered are banking services only or extra-banking services shall be included.
We suggest another option: the symbol constituted of the acronyms of the Statement of Fees with EU acronyms and a text next to the symbol indicating “Standardised EU statement of fees” to facilitate the distinction between the EU document and the national one (e.g. EU-SoF).
However, there is one point ABI would like to highlight regarding the comprehensive cost indicator. It must be noted that according to Recital 19 this indicator seems to be required for the FID only. Therefore, ABI considers that the reference to the comprehensive cost indicator should be removed from the draft ITS related to SoF (specifically, point 6 of the ITS introductory part and Article 10 (4) of the Regulation).
However, ABI would like to underline that, given the objective of the SoF to provide the consumer with all the relevant information, it seems that the sub-heading “other services” may include quite a wide range of services (depending on what kind of/how many transactions the consumer makes in the relevant period). Concerning the provision stated in Article 12 (8) of the ITS, according to which “where the fee has changed during the relevant period, PSPs shall list the fee applied during each period, by adding new lines in the “Unit fee” column”, ABI fears that such a granular/detailed level of information could be difficult for consumers to understand.
As previously stated for the FID, regarding Article 4 of the draft ITS, we note that the heading of the article refers to ‘account provider’ while the “body” refers to PSP. ABI believes that for the sake of clarity it might be better to use the same terminology both in the title and in the body of the article.
Question 1: Do you agree with the EBA’s decision to take a broad approach to defining ‘service’? Please explain your reasoning.
Associazione Bancaria Italiana (ABI) welcomes the public consultation launched by the EBA on 22nd September 2016 on Technical Standards on standardised terminology and disclosure documents under the Payment Accounts Directive (PAD) and wishes to provide the views of its member banks on the proposed Technical Standards and the answers to the consultation questions.Overall, ABI considers that the draft Technical Standards on standardised terminology and disclosure documents are consistent with the PAD provisions and in line with the aim of enhancing payment accounts’ comparability for the benefit of consumers.
However, ABI would like to point out that for the sake of competitiveness of the banking industry, both at national and at European level, it is crucial to avoid products’ standardisation.
Moreover, we would like to suggest to take a coordinated approach with other legislative requirements (e.g. PSD 2).
* * * * *
Question 1: Do you agree with the EBA’s decision to take a broad approach to defining ‘service’? Please explain your reasoning.
ABI considers that EBA’s decision to take a broad approach to defining ‘service’ is in line with the mandate - foreseen in Article 3 (4) of the PAD - for the EBA to set out the Union standardised terminology ‘for those services that are common to at least a majority of Member States’.
Since the PAD does not clarify which services specifically constitutes a ‘service’ in the context of the Directive and given the differences in services and related pricing structures that exist between payment services providers (PSPs) and between Member States (MS), it seems quite straightforward that - as a result - national authorities took different approaches in defining their respective provisional lists of the most representative services linked to a payment account and subject to a fee.
Accordingly, ABI agrees with the idea that - in such a heterogeneous context - the broad approach, that looks at the core of the definition, regardless of any specific types or sub-categories which may be referred to on some provisional lists, allows to identify a higher number of most common services compared to the narrow approach (although the narrow approach - by taking into account the specificities of each service – allows to distinguish the services at a more granular level). This in turn should ensure that the Directive’s aim of increasing comparability is achieved for the widest possible number of services.
However, ABI also believes that taking this option might pose a challenge in MS for their task of integrating, in the next step of the process, the final Union standardised terminology into their respective provisional lists, as required in Article 3 (5) of the Directive, because in several countries the integration might not be a straightforward task of replacing the national term by the standardised one. Although the ‘integration process’ is not part of the EBA mandate, ABI believes that it might be advisable - in order to ensure a certain degree of harmonization among MS - to provide MS with specific instructions as to how to integrate the Union standardised terminology into their respective provisional lists.
Question 2: Do you consider the services that the EBA has selected for standardised terms and definitions to be suitable to achieve the aims of the Directive? Please explain your reasoning.
ABI welcomes the selection process adopted by the EBA to identify the most common services - based on the frequency of services included by national authorities and taking the broad approach of counting the number of times services appeared on MS provisional lists - and considers the proposed services suitable to achieve the aim of the Directive.In particular, taking into consideration the assessment procedure used by the EBA (the 28 lists were assessed in order to identify which services were mentioned in at least 15 national lists), ABI agrees on the eight services proposed for standardised terms and definitions which appear to be those that are common to at least a majority of Member States, consistently with the PAD provisions.
Nevertheless, it is important to bear in mind that, given the differences in terms of variety of services linked to payment accounts among MS, the list identified by the EBA clearly represents a ‘compromise solution’. Moreover, we would like to underline that this list should be kept “open” and updated to consider possible future changes due to the “evolution” of services linked to payment accounts and their spread across MS.
Question 3: Do you consider the drafting decisions taken by the EBA for the standardised terms and definitions, and the resultant provisions in Recitals of the draft RTS, to be suitable for achieving the aims of the Directive of enhancing transparency and comparability? Please explain your reasoning.
ABI agrees on the drafting decisions taken by the EBA for the standardised terms and definitions (and on the resultant provisions in Recitals of the draft RTS), which appear to be in line with the Directive’s aim of fostering transparency and comparability. Specifically, ABI shares the EBA’s view that the Union standardised terms and definitions should:• be drafted in clear, simple, and consumer-oriented language which avoids the use of legal terminology.
• use the third person.
• be short and direct to enable consumers to understand at a glance which service is being referred to. The definitions should be as brief as possible whilst also containing the most relevant information on the service. Crucially, the definitions should not seek to describe every aspect of the service but rather only its key features, in particular those which are important to consumers in differentiating the service from other similar ones.
• focus on the service itself rather than on defining precisely what is meant by the constituent elements of the service.
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.
ABI believes the terms and definitions proposed by the EBA in the Annexes to the draft RTS (and the resultant provisions in Recitals of the draft RTS) respond to the need of enhancing transparency and comparability.However, as regards the terms “providing a debit card” (“rilascio di una carta di debito”) and “providing a credit card” (“rilascio di una carta di credito”), we do not completely agree with the use of the word “providing”. We believe it could be better to use the terms “debit card” and “credit card”, as for the other services included in the table (“standing order”, “direct debit”, etc.), thus referring - in a broader sense - not only to the idea of providing a card, but also to the card’s functionalities.
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.
ABI shares the EBA’s view that the Union standardised FID should be clear when read by consumers as well as easy to be produced by PSPs and believes the FID template proposed in the draft ITS and its Annex appears to be consistent with the requirements of article 4 (2) of the PAD, according to which the FID should be a short and stand-alone document presented in a clear and easy-to-read way. ABI agrees on the proposed requirements prescribed for the FID template (regarding format and size of the document, font size, colours used in the template, etc.).However, we think it is necessary to include into the FID the “last update date”, for consumers to know that the economic conditions displayed in the document refer to a specific moment/period.
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.
ABI believes that the common symbol in the FID template proposed by the EBA, in its simplicity, could help consumers to distinguish the FID from other documents related to payment accounts.However, we suggest another option: the symbol constituted of the acronyms of the Fee Information Document with EU acronyms and a text next to the symbol indicating “Standardised EU information sheet” to facilitate the distinction between the EU document and the national one (e.g. EU-FID).
Question 7: Do you consider the proposed instructions for the completion of the FID template contained in Articles 2 to 11 of the draft ITS, to be suitable to achieve the aims of the Directive? Please explain your reasoning.
According to ABI the proposed instructions for the completion of the FID template contained in Articles 2 to 11 of the draft ITS appear to be quite suitable for achieving the Directive’s aims. Indeed, the simple and standardised structure proposed for the FID seems to enhance the overall products’ comparability.However, it must be noted that such a simplification/standardisation of the template does not allow PSPs to fully represent the specificities (in terms of pricing structures) of the payment accounts offered to consumers.
Moreover, ABI believes that some clarifications should be made with regard to the following points (here we refer to both the FID template and the FID template instructions):
1. In the proposed instructions for the completion of the FID template, it is not clear where and how the PSPs can describe and display information regarding (possible) ‘promotional offers’ and/or ‘discounts’ linked to the payment account. In many cases, fees vary during the year due to contractual terms and conditions (conditions that might not be included directly in the FID – e.g. the account fees change due to the amount of investments held by the client).
ABI believes that in order to allow consumers to make informed choices it is crucial to provide them with the necessary information. In this respect, it could be useful to include in the FID an ‘additional information’ box where PSPs can explain/underline the product specificities.
2. In the main text of the Consultation Paper (point. 71, pag.22), EBA indicates that - based on the PAD definition of ‘fees’ (“all charges and penalties, if any, payable by the consumer to the PSP for or in relation to services linked to a payment account”) - taxes charged by the PSP on behalf of tax authorities will have to be included in the amount disclosed.
ABI believes that:
- it should be explicitly mentioned in the FID that taxes are included;
- it is necessary to provide consumers with the related fee/tax structure details, otherwise the information could be misleading.
In this respect, therefore, ABI suggests to define a unique criterion at EU level for the PSPs to display this kind of information in the FID in a clear and easy-to-read way, also with the aim of assuring a level playing field and cross-border coherence. This is particularly true with reference to taxes, in order to take into account the specific rules provided by national tax legislation (e.g. exemptions/exceptions).
3. According to the PAD, PSPs shall display in the FID the comprehensive cost indicator summarising the overall annual cost of the payment account, where required by national provisions. However, it must be noted that - since the method to calculate the comprehensive cost indicator is not the same across Europe - the indicator used in country A may not be compared with the indicator used in country B. Hence, ABI considers that it is advisable to include a short explanation (or a disclaimer) in the FID, next to the comprehensive cost indicator table, for consumers to understand that such indicators represent an estimate of the payment account cost and that methodologies differ across Europe.
Question 8: Do you consider the proposed instructions for the completion of the FID template contained in Articles 2 to 11 of the draft ITS, to be clear and easy to follow? Please explain your reasoning.
ABI considers the proposed instructions for the completion of the FID template contained in Articles 2 to 11 of the draft ITS to be clear and easy to follow. The more instructions are detailed and accurate, the better in terms of comparability.In order to make the instructions even clearer, ABI believes it is advisable to specify that the FID will display the fees for all services contained in the list of the most representative services linked to a payment account at national level (which in turn means all the services included in the final list developed by the competent authorities). Similarly, it could be useful to explain how the services included in the final list will be divided into the 5 categories identified by the EBA (‘general account services’, ‘payments’, ‘card and cash’, ‘overdraft and related services’, ‘other services’).
Regarding Article 4 of the draft ITS, we note that the heading of the article refers to ‘account provider’ while the “body” refers to PSP. ABI believes that for the sake of clarity it might be better to use the same terminology both in the title and in the body of the article.
With reference to Article 8 (2), stating that “all services covered by the package, regardless of whether they are included in the final national list of most representative services linked to a payment account referred to in Article 3 (5) of the Directive 2014/92/EU, shall be listed in the section of the table on general account service” it is not clear whether the services to be considered are banking services only or extra-banking services shall be included.
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.
As previously stated for the FID template, ABI shares the EBA’s view that the Union standardised SoF should be clear when read by consumers as well as easy to be produced by PSPs. ABI believes the SoF template proposed in the draft ITS and its Annex appears to be consistent with the requirements of article 5 (4) of the PAD, which specifies the minimum information to be included in the SoF as well as requirements for the form and format of the SoF. ABI agrees on the proposed requirements prescribed for the SoF template (regarding format and size, font size, colours used in the template, etc.).Question 10: Do you consider the common symbol 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.
ABI believes the proposed common symbol could help consumers to distinguish the SoF from other documents related to payment accounts, although it must be noted that it appears to be quite similar to the one included in the FID template.We suggest another option: the symbol constituted of the acronyms of the Statement of Fees with EU acronyms and a text next to the symbol indicating “Standardised EU statement of fees” to facilitate the distinction between the EU document and the national one (e.g. EU-SoF).
Question 11: Do you consider the proposed instructions for payment services providers on how to complete the SoF template contained in Articles 2 to 16 of the draft ITS, to be suitable to achieve the aims of the Directive? Please explain your reasoning.
According to ABI the proposed instructions for the completion of the SoF template contained in Articles 2 to 16 of the draft ITS appear to be suitable for achieving the Directive’s aims.However, there is one point ABI would like to highlight regarding the comprehensive cost indicator. It must be noted that according to Recital 19 this indicator seems to be required for the FID only. Therefore, ABI considers that the reference to the comprehensive cost indicator should be removed from the draft ITS related to SoF (specifically, point 6 of the ITS introductory part and Article 10 (4) of the Regulation).
Question 12: Do you consider the proposed instructions for payment service providers on how to complete the SoF template, contained in Articles 2 to 16 of the draft ITS, to be clear and easy to follow? Please explain your reasoning.
ABI considers the proposed instructions for the completion of the SoF template contained in Articles 2 to 16 of the draft ITS to be clear and easy to follow.However, ABI would like to underline that, given the objective of the SoF to provide the consumer with all the relevant information, it seems that the sub-heading “other services” may include quite a wide range of services (depending on what kind of/how many transactions the consumer makes in the relevant period). Concerning the provision stated in Article 12 (8) of the ITS, according to which “where the fee has changed during the relevant period, PSPs shall list the fee applied during each period, by adding new lines in the “Unit fee” column”, ABI fears that such a granular/detailed level of information could be difficult for consumers to understand.
As previously stated for the FID, regarding Article 4 of the draft ITS, we note that the heading of the article refers to ‘account provider’ while the “body” refers to PSP. ABI believes that for the sake of clarity it might be better to use the same terminology both in the title and in the body of the article.