The PSD1 allows a relatively large number of exceptional situations for the permit requirement for payment institutions. In the PSD2 these exemptions have been tightened in many cases. The European Commission was concerned that the differences in interpretation by the individual EU member states were potentially anti-competitive. These differences in interpretation are also contrary to the ambition to arrive at a uniform European payment market.
In addition, the providers of financial services often thought they could judge for themselves whether they could make use of an exemption on the basis of PSD1. PSD2 forces, among other things, that service providers are in more cases obliged to report their activities to the competent authorities. This means that the PSD2 allows for greater regulatory supervision.
The following permit exemptions have been restricted:
- Exemption for limited networks
PSD1 contains a license exemption for offering payment services based on payment instruments that you can only use to purchase goods or services within a limited network of service providers or for a limited range of goods or services (for example certain shopping cards, gift cards, fuel cards and loyalty programs).
However, the exemption did not clarify what ‘limited network’ exactly defined. As a result, the European Commission is concerned that the parties will apply the exemption more widely than initially intended, resulting in greater risks for consumers and a lack of legal protection.
The PSD 2 therefore tightens this exemption; it only applies to payment instruments used for:
the purchase of goods and services at a specific store chain, or
the purchase of a very limited range of goods and services, or
in one Member State where the instrument is regulated by a national or regional government.
In addition, if a service provider wishes to claim this exemption and if he or she exceeds €1,000,000 in a given year, the service provider is required to inform the national regulator. The latter must then assess whether the exemption may be maintained.
Under PSD1, operators of independent ATMs are fully exempted from the licensing obligation for a payment institution. The exemption stimulated the growth of independent ATM providers, especially in less populated areas. PSD2 maintains this license but adds the obligation to these providers to make clear to the customer prior to the transaction what the additional costs are for the use of the ATM.
- Exemption for telecom providers
PSD1 contained a license exemption for payment transactions via a telecom or IT device (such as a mobile phone), whereby the network manager acted not only as an intermediary for the delivery of digital goods and services, but also provided a ‘value-added’ service to its customers (such as operator billing or direct telephone services). This exemption was ambiguous and has been implemented in many different ways within the EU.
In view of the growth in the volume of payments made by consumers via smartphones and other IT devices, this exemption has been considerably tightened up in PSD2.
Under PSD2, this license exemption only applies to digital content (for example, apps, wallpapers, ringtones), voice-based services, charitable activities or the purchase of tickets. A condition for this is that the value of each individual payment transaction does not exceed €50 and the cumulative value of the payment transactions for a single subscriber does not exceed €300 per month. If a telecom provider offers payment services that fall outside these frameworks, then a payment institution license is required.
- Exemption for commercial agents
PSD 1 included an exemption for payment institutions acting as a commercial agent authorized by the payer or beneficiary to purchase or sell services or goods. This exemption has been applied in various ways in the EU member states. Several Member States allowed a commercial agent to act for both the payer and the beneficiary. This was against the sore leg of the European Commission, because it bypasses the European payment guidelines.
This exemption has therefore been tightened under PSD2: in the future this exemption will only be applicable if a commercial agent is acting on behalf of either the payer or the beneficiary. If a commercial agent acts as an intermediary for both parties, the exemption only applies if the agent is never in possession of or has control over the funds of the buyer and seller
> 3. Recharging of card payment costs restricted