The EU Directive 2015/2366 defines a ‘payment transaction’ in article 4 as an ‘act, initiated by the payer or on his behalf or by the payee, of placing, transferring or withdrawing funds, irrespective of any underlying obligations between the payer and the payee’. Under the EU Directive 2015/2366, the digital download exemption has been replaced by the electronic communications exclusion (ECE) in its article 3 ‘Exclusions’. The ECE excludes payment transactions by a provider of electronic communications networks or services where these are provided in addition to electronic communications services provided to a customer.  The ECE is limited to the purchase of digital content and voice based services. It also includes charitable giving and the purchase of tickets but only via electronic devices, charged to the subscriber’s bill.  The ECE also introduces value limits for transactions that are within the ECE: 50€ per single payment transaction and 300€ cumulative value for an individual subscriber per month.  The purchase of digital contents and voice based premium rate services involves several “intermediaries” (as premium rate operators or transit operators) implied in the delivery of the services and contents as well as in the invoicing/cashing, in the same way they proceed for other telco services. This mesh architecture enables stakeholders to provide content and premium rate services while being assured of reaching every potential customer and of being paid for every delivered content or service, whoever is the customer’s local access network operator. The question rises of the practical application of Directive (UE) 2015/2366 to these intermediaries.  NCA’s interpretation: The NCA does not consider the payment transaction as an ‘end to end’ activity but as a succession of payment services between intermediaries, where only the first transaction in the chain provided by the local access network operator benefits of the ECE.Therefore, intermediaries as premium rate services operators and transit operators should not benefit from the ECE and would have to register as payment institutions or agents of payment institutions. Other interpretations in Europe: Given the room left to the interpretation regarding the implementation of the ECE, two countries, Member State A and Member State B view favouring its application across the value chain involved in  the provision of the service and the payment transaction. Despite different interpretations it is important to note that these two countries came to the same conclusion. 

In Member State A, the financial supervisor, and the regulatory authority for telecommunications, jointly agreed.

They decided not to classify as Payment Services the so-called “Online Billing” flavor of Intelligent Network services, i.e. when the value of the call is entirely determined by the local access network operator to which the subscriber is connected (counting the number of calls or of minutes), based on the logic of recital 52 of EU Directive 2015/2366, which consists in saying that, since three-corner services (consumer, operator to which the subscriber is connected, Intelligent Network service provider) were not classified as payment services, then four-corner services (consumer, local access network operator, Intelligent Network operator, Intelligent Network service provider) should also be not classified as payment services, for competition promotion purposes; And therefore the ECE applies for all the intermediaries.

In Member State B the exclusion historically applied to all operators in the voice-based premium rate services value chain and nothing has changed since EU Directive 2015/2366.  Member State B’s financial supervisor considers that “where a network operator benefits from the exclusion with respect to a particular transaction, the provider of any other payment service resulting from that transaction will also benefit from the exclusion” and specifies in its Handbook that this exclusion ‘cascades’ to include intermediaries that facilitate the transfer of money to merchants; As far as the rest of Europe is concerned, no other country has commented, to our knowledge, on the scope of application of the ECE, and probably continue to include all the intermediaries of the chain as when the PSD1 was the current law.