- Question ID
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2021_6283
- Legal act
- Directive 2015/2366/EU (PSD2)
- Topic
- Other topics
- Article
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1
- Paragraph
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1
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
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0
- Name of institution / submitter
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Croatian National Bank
- Country of incorporation / residence
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Croatia
- Type of submitter
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Competent authority
- Subject matter
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Provision of the "acquiring of payment transactions" payment service in the EU
- Question
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Please provide your opinion on whether the payment service – acquiring of payment transactions on an EU webshop – can be provided by a payment service provider from a third country. Please refer to Q&A 4233.
- Background on the question
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Following the United Kingdom withdrawal from the European Union on 31 January 2020 (Brexit), several UK financial institutions made enquiries regarding their possibilities to provide payment services after Brexit.
The European Banking Authority addressed communications to payment service users and UK financial institutions (link: https://www.eba.europa.eu/risk-analysis-and-data/brexit), explaining the meaning of the Withdrawal Agreement reached between the EU and UK, in the context of the provision of services by UK financial institutions in the EU.
These explanations were very helpful; nevertheless, there are certain issues that require further clarification.
Furthermore, we would like to consider this question as not limited to UK financial institutions, but in the context of financial institutions from all the third countries (outside EEA, hereinafter referred to as EU).
Payment services in the EU can be provided by the payment service providers listed in Article 1 of Directive (EU) 2015/2366 (PSD2). Financial institutions from the countries outside the EU not holding a valid authorisation issued by the supervisory authorities in the EU do not have the right to provide payment services in the EU.
On the other hand, payment service users from the EU may maintain their bank accounts held with financial institutions outside the EU and can use payment services provided by the financial institutions from non-EU countries, as long as they are provided outside the EU.
Financial institutions from third countries may provide payment services to payment service providers from the EU as long as they do not have physical substance on the EU territory and as long as they do not actively solicit such customers from the EU.
Please bear in mind the provisions of Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange fees for card-based payment transactions. In order to limit the scope of Regulation (EU) 2015/751 to "card-based payment transactions carried out within the Union, where both the payer's payment service provider and the payee's payment service provider are located therein", the Regulation defines 'point of sale' as:
"(29) ‘point of sale’ means the address of the physical premises of the merchant at which the payment transaction is initiated. However:
(a) in the case of distance sales or distance contracts (i.e. e-commerce) as defined in point 7 of Article 2 of Directive 2011/83/EU, the point of sale shall be the address of the fixed place of business at which the merchant conducts its business regardless of website or server locations through which the payment transaction is initiated;
(b) in the event that the merchant does not have a fixed place of business, the point of sale shall be the address for which the merchant holds a valid business licence through which the payment transaction is initiated;
(c) in the event that the merchant does not have a fixed place of business nor a valid business licence, the point of sale shall be the address for correspondence for the payment of its taxes relating to its sales activity through which the payment transaction is initiated."
Please also bear in mind the EBA's answer provided in Q&A 4233.
EU payment service users should have the same rights while making card payments in EU stores, no matter whether that store is physical or virtual (webshop).
Also, EU payment service users should be given the same level of protection by the provisions of EU law – by the provisions of Directive (EU) 2015/2366 PSD2 and Commission Delegated Regulation (EU) 2018/389 (RTS on SCA) in card payments in EU shops (physical and virtual).
The provisions of EU law (PSD2, RTS on SCA, AMLFT provisions, Regulation (EU) 2015/751 on interchange fees, etc.) do not apply to payment service providers from third countries.
- Submission date
- Final publishing date
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- Final answer
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The acquiring of payment transactions, as defined in Article 4, point (44) of Directive (EU) 2015/2366 (PSD2) is a payment service regulated under PSD2. Accordingly, the provision of such services within the EU requires authorisation as a payment service provider (PSP), as referred to in Article 1(1) of PSD2.
According to Article 11(1) of PSD2, all entities seeking authorisation as a payment institution under PSD2 must be a legal person established in a Member State.
Consequently, entities from third countries that have not been granted authorisation from competent authorities in a Member State to provide acquiring services, as listed in Annex I point 5 of PSD2, are not permitted to offer these payment services within the EU. The same condition regarding the requirement of establishment in the EU applies to credit institutions authorised in the EU/EEA. and branches that are authorised to operate in the EU/EEA of undertakings established in a third country as referred to in Article 47 Directive 2013/36/EU (please see Q&A 6882); electronic money institutions, in accordance with Article 3(1) of EMD2, and to other PSPs listed in Article 1(1) of PSD2, in accordance with the regulations specific to these entities.
Regarding the obligations of PSPs in relation to the application of SCA rules in relation to the so-called “one-leg” transactions, where the acquirer (the payee’s PSP) is located outside the Union, please refer to Q&A 4030 and Q&A 4233.
Disclaimer: The answer clarifies provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.
- Status
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Final Q&A
- Answer prepared by
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Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Disclaimer
The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.