What changed between the draft committee report and the plenary report

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

8 unchanged paragraphs

on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 260/2012 and (EU) 2021/1230 as regards instant credit transfers in euro

(COM(2022)0546 – C90362/2022 – 2022/0341(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2022)0546),

– having regard to Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90362/2022),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the opinion of the European Central Bank of 1 February 2023,

Changed:– having regard to the opinion of the European Economic and Social Committee of 22 February 2023,

– having regard to Rule 59 of its Rules of Procedure,

Changed:– having regard to the report of the Committee on Economic and Monetary Affairs (A90000/2023),(A9-0230/2023),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 1

Removed:Recital 4: (4) A number of national regulatory solutions have already been adopted or proposed to increase the uptake of instant credit transfers in euro, including by strengthening PSUs’ protection from sending funds to an unintended payee or specifying the process of compliance with obligations flowing from Union sanctions. In the absence of a Union-wide framework, those national regulatory solutions pose a risk of fragmentation of the internal market, thus increasing the compliance costs due to different sets of national regulatory requirements, and making the execution of cross-border instant credit transfers more difficult.

Added:AMENDMENTS BY THE EUROPEAN PARLIAMENT*

Removed:The Rapporteur wishes to highlight the importance of legislating for instant payments at the European level.

Added:to the Commission proposal

Removed:Recital 6: (6) Ensuring that all PSUs in the Union are able to place payment orders for and receive instant credit transfers in euro is a precondition for an increased uptake of such transactions. Currently, at least one third of PSPs in the Union do not offer instant credit transfers in euro. Moreover, the rate at which PSPs have been adding instant credit transfers to their services has been, over the last few years, too slow, which hinders further integration of the Union’s internal payments market and limits potential benefits for PSUs. Therefore, PSPs providing credit transfer services to their PSUs should be required to offer the service of sending and receiving instant credit transfers in euro.

Added:---------------------------------------------------------

Removed:Brief clarification of the justification for the current regulation using terms that will repeat throughout.

Added:REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

Removed:Recital 8: (8) There is a variety of interfaces through which PSUs can place a payment order for a credit transfer in euro, including via online banking, a mobile application, an automated teller machine, in a branch, or by phone. To ensure that all PSUs have access to instant credit transfers in euro, there should be no difference in terms of the interfaces through which PSUs can place payment orders for instant and other types of credit transfer transactions. In the case of paper-based instant credit transfer orders submitted in a bank branch, the time of receipt should be considered to be the moment when the order is entered into the payer PSP’s IT system, which should take place as soon as possible. Moreover, where it is possible for a PSU to submit to a PSP payment orders for credit transfers packaged together, that same possibility should also be available with respect to instant credit transfers in euro. In such cases, the payer’s PSP should immediately begin to convert the package of payment orders submitted by the PSU into individual credit transfer transactions and the time of receipt should be considered to be the moment when the conversion process is completed. PSPs should be able to offer all credit transfers in euro initiated by their PSUs as instant by default.

Added:amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and 2014/92/EU as regards instant credit transfers in euro

Removed:This amendment aims to assuage any fears that paper or bulk channels are impossible to be made instant by means of a clarification.

Added:(Text with EEA relevance)

Removed:Recital 9: (9) Directive 98/26/EC of the European Parliament and of the Council36 came into effect before the payments landscape of today was shaped. As such, a revision to that Directive would be essential to the achievement of an even greater uptake of instant credit transfers in euro because it would allow PSPs such as payment and e-money institutions to be included within the scope of this Regulation in the future.

Added:THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Removed:Included as many PSPs would not be included in the scope of the present regulation as they are covered by the SFD

Added:Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Removed:Recital 11: (11) Security of instant credit transfers in euro is fundamental for increasing PSUs’ confidence in such services and ensuring their use. Payers intending to send a credit transfer to a given payee may, as a result of fraud or error, provide a payment account identifier which does not correspond to an account held by that payee. Under Directive (EU) 2015/2366 of the European Parliament and of the Council37 , the only determinant of the correct execution of the transaction with respect to the payee is the unique identifier, and PSPs are not required to verify the name of the payee. In the case of instant credit transfers, there is not enough time for the payer to realise the occurrence of a fraud or error and to try to recover the funds before they are credited to the payee’s account. PSPs operating inside the Union should therefore verify whether there is any discrepancy between the unique identifier of the payee and the name of the payee provided by the payer, and notify the payer placing a payment order for an instant credit transfer in euro about any such discrepancies detected. To avoid undue frictions or delays in the processing of the transaction instantly, the payer’s PSP should provide such notification within no more than a few seconds from the moment the payer provided the payee information. To allow the payer to decide whether to proceed with the intended transaction, the payer’s PSP should provide such notification before the payer authorises the transaction. Some…

Added:Having regard to the proposal from the European Commission,

Removed:The amendment is added to demonstrate the IBAN check is just one potential way that PSPs can offer a security check to their PSU. The rapporteur favors a non-prescriptive and facilitated approach for consumers.

Added:After transmission of the draft legislative act to the national Parliaments,

Removed:Recital 13: (13) Authorising a payment transaction where the PSP has detected a discrepancy and has notified that discrepancy to the PSU can result in the funds being transferred to an unintended payee. In such cases, PSPs should not be held liable for the execution of the transaction to an unintended payee, as laid down in Article 88 of Directive (EU) 2015/2366. PSUs should be able to opt out from using that service at any time during their contractual relationship with the PSP. After opting out, PSUs should be able to opt in to again avail of the service. PSPs should inform PSUs about the possibility of opting out from the service and the implications for PSP liability and PSU refunds rights of their choice to ignore the notified discrepancy.

Added:Having regard to the opinion of the European Economic and Social Committee,

Removed:This is an important clarification for PSUs and touches on consumer protection.

Added:Having regard to the opinion of the European Central Bank,

Removed:Recital 15: (15) To prevent the initiation of instant credit transfers from payment accounts belonging to listed persons or entities and to immediately freeze funds sent to such accounts, PSPs should carry out verifications of their PSUs as soon as possible following the entry into force of a new restrictive measure adopted in accordance with Article 215 TFEU providing for asset freeze or prohibition of making funds or economic resources available. That requirement applies to all PSPs sending and receiving instant credit transfers, thus ensuring that all PSPs comply with their obligations stemming from Union sanctions in an effective manner. The specific obligation to periodically verify whether PSUs are listed persons or entities does not interfere with PSPs’ obligation to apply other measures to ensure mitigation of risks in their operation, such as measures to comply with obligations arising from the anti-money laundering regulatory framework or measures to comply with restrictive measures that are not adopted in accordance with Article 215 TFEU.

Added:Acting in accordance with the ordinary legislative procedure,

Removed:The rapporteur wishes to ensure alignment with existing legislation, like AML, and does not wish to call for more burdensome sanction list checks. The rapporteur favors a move from a transaction-based screening system to a client-based one.

Added:Whereas:

Removed:Recital 16: (16) Failure of one PSP to carry out timely verifications of its PSUs could result in a failure of the other PSP involved in carrying out the same instant credit transfer transaction to freeze funds of a listed person or entity or not to make funds or economic resources available to such person or entity. PSPs that incur penalties for non-compliance with their obligations stemming from Union sanctions due to the failure of another PSP to carry out timely verifications of its PSUs should be compensated for those penalties by that failing PSP.

Added:(1) Regulation (EU) No 260/2012 of the European Parliament and of the Council provides the foundation for the single euro payments area (SEPA). To create favourable conditions for increased competition, in particular for payments at point of interaction (PoI), the SEPA project should be continuously updated to reflect innovation and market developments in payments, promote the development of new Union-wide payment products, and facilitate access for new market entrants.

Removed:Word added to clarify sentiment of recital

Added:(2) In 2017, a Union-wide scheme for the instant execution of credit transfers in euro was agreed between payment service providers (PSPs) under the auspices of the European Payments Council. The efforts of the European payments industry have not proven sufficient to ensure a high uptake at Union level of instant credit transfers in euro. Only a widespread and rapid increase in that uptake can unlock the full-scale network effects of instant credit transfers in euro, leading to benefits and economic efficiency gains for payments services users (PSUs) and providers, reduced market concentration, increased competition and choice of electronic payments, in particular for cross-border payments at PoI.

Removed:Regulation (EU) No 260/2012

Added:(3) Regulation (EU) No 260/2012 established technical and business requirements for credit transfers and direct debits in euro. Instant credit transfers in euro are a relatively new category of credit transfers in euro which emerged on the market only after the adoption of that Regulation. It is therefore necessary to provide for specific requirements for instant credit transfers in euro, in addition to the general requirements applicable to all credit transfers to ensure the proper functioning and strengthening of the internal market, as well as facilitate further integration of the Union payments market.

Removed:Article 1 – paragraph 1 – point 2, Article 5a – paragraph 1 – subparagraph 1: PSPs that offer to their PSUs a payment service of sending and receiving credit transfers in euro shall offer to all their PSUs a payment service of sending and receiving instant credit transfers in euro.

Added:(3a) To make instant payments more accessible, they should also be available as basic features in a payment account. This Regulation therefore also amends Directive 2014/92/EU of the European Parliament and of the Council. Moreover, to widen the benefits of instant credit transfers to PSUs, Member States whose currency is not the euro should be able to apply this Regulation to domestic instant credit transfers in their own currency.

Removed:Clarification

Added:(4) A number of national regulatory solutions have already been adopted or proposed to increase the uptake of instant credit transfers in euro, including by strengthening PSUs’ protection from sending funds to an unintended payee or specifying the process of compliance with obligations flowing from Union sanctions. Differences in those national regulatory solutions and the absence of common Union-wide rules pose a risk of fragmentation of the internal market, thus increasing the compliance costs due to different sets of national regulatory requirements, and making the execution of cross-border instant credit transfers more difficult. Uniform rules on instant credit transfers in euro, including cross-border transfers, should therefore be introduced to prevent such obstacles from arising.

Removed:Regulation (EU) No 260/2012

Added:(5) Prior to the emergence of instant credit transfers, payment transactions were generally bundled by PSPs and submitted to a retail payment system for clearing and settlement purposes at pre-specified times. However, in retail payment systems currently used to process instant credit transfers in euro, payment transactions are submitted individually, processed in real time and round the clock. To reflect this, it is necessary to amend the definition of ‘retail payment system’.

Removed:Article 1 – paragraph 1 – point 2, Article 5c – paragraph 1 – subparagraph 1: With regard to instant credit transfers, a payer’s PSP shall verify, free of charge to PSUs, whether the payment account identifier and the name of the payee provided by the payer match. Where they do not match, that PSP shall notify the payer of any discrepancies detected and the degree of any such discrepancy.

Added:(6) Ensuring that all PSUs in the Union are able to place payment orders for and receive instant credit transfers in euro is a precondition for an increased uptake of such transactions. Currently, at least one third of PSPs in the Union do not offer instant credit transfers in euro. Moreover, the rate at which PSPs have been adding instant credit transfers to their services has been, over the last few years, too slow, which hinders further integration of the Union’s internal payments market, undermines strategic autonomy in the Union payments market and limits potential benefits for PSUs. Therefore, PSPs providing credit transfer services in euro to their PSUs should be required to offer the service of sending and receiving instant credit transfers in euro.

Removed:The rapporteur wishes to ensure that consumers benefit from the security feature built into instant payment systems. The IBAN check should therefore be offered free of charge to PSUs.

Added:(7) To create an integrated market for instant credit transfers in euro, it is essential that such transactions are processed in accordance with a common set of rules and requirements. An instant credit transfer in euro enables funds to be credited to the account of the payee within seconds and round the clock. The round the clock availability every day of the year is an intrinsic feature of instant credit transfers. Therefore, it is appropriate that the definition of instant credit transfers refers to the specific conditions that they should meet regarding the time of receipt of payment orders, processing, crediting and value dating.

Removed:Regulation (EU) No 260/2012