To further strengthen the European payments ecosystem, ESBG supports further standardisation of European
APIs and the interconnectivity throughout the industry as well as a data-sharing economy, as long as it is
based on mutual benefits and reciprocity. ESBG believes that a common SEPA API Access Scheme should
be developed based on mutual benefits that would reduce investments required for PSPs to connect to each
other. The EU should support such a scheme.
With regard to payment-related functionalities that go beyond the scope of PSD2 and that are required by
TPPs (such as payment guarantees, delegated SCA, etc.), we believe these should be elaborated through a
coordinated market-driven initiative within the Euro Retail Payments Board (ERPB) SEPA API access scheme
work. The ERPB should seek to start working on a scheme as soon as possible, building on the work already
carried out within the ERPB. The various business models of TPPs (pre-PSD2 TPPs and post-PSD2 TPPs)
should be fairly represented in these ERPB discussions though.
Finally, with regards to interchange fees, ESBG welcomes the European Commission report published in 2020
and supports the conclusion that there is currently no need to revise the IFR.
PSD2-supported access to payment accounts data has fostered the entry of new players within the payments
industry, acting as payment initiators or account aggregators. Banks welcome innovation and competition by
new payment service providers. However some of these new players are driven by business models that are
cross-subsidised by customer engagement and commercialised data profiling, which creates pricing of the
actual payment service that traditional banks cannot match. The fact is that banks are required to provide
these new entrants with access to payment account data without being compensated for the investments
that banks need to make.
Therefore, we believe that the full benefits of ‘open payments’ beyond PSD2 and further expansion of data
sharing can only be reaped if done on the basis of mutual benefits and a fair distribution of value across
market players. For instance, taking payments beyond PSD2 should be developed through coordinated
market-driven initiatives such as establishing a SEPA API access scheme. The Payment Accounts Directive
(PAD) requires banks to provide bank accounts to all types of European consumers, regardless if they are
profitable or not. Additionally, it is worrying to observe that some TPPs still deploy direct access to customer
accounts via screen scraping or reverse engineering even though they are required to use the dedicated
interface (if provided) in accordance with their PSD2-licence.
The payments market in the EU continues to undergo fundamental shifts due to a mix of regulatory changes,
changing customer behaviour and demand, and technological development, resulting in a multitude of service
offerings. Cards are still the most commonly used electronic payment instrument for consumer-to-retailer
payments in the EU, and card payment volumes have more than doubled in the last ten years. COVID-19 is
also accelerating consumer and merchant trends away from cash and towards contactless and electronic
payments (of which many are card-based). In this respect, it is important to create the best possible
environment for existing European schemes and future pan-European payment solutions to be innovative
and reliable. The IFR is a crucial piece of legislation as it creates a stable legal environment on which such
pan-European solutions could be built upon and flourish. ESBG believes that amending the IFR would have
detrimental effects, especially on competition and innovation.
New technologies are currently shaping how people interact and engage in commerce. For the market acceptance of payment methods, it is important for the whole payments industry to be able to develop and be integrated into new technologies. However, it is currently very difficult for the industry to set out a clear and consistent strategy for the years to come, within a stable regulatory framework and through returns on investments. ESBG considers that the following aspects are essential to a successful payments strategy for the European Union:
The European payments market has undergone fundamental shifts over the past years, sparked by a mix
of changing customer needs, regulatory action, technology and innovation, and increased competition.
The revised Payment Services Directive (the so-called PSD2) entered into force as of 13 January 2018 with
the objective of making payments more secure, boosting innovation and helping banking services to adapt to
new technologies. In a nutshell, PSD2 enabled third-party providers (TPPs) to build financial services on top
of banks’ data and infrastructure by accessing bank customers’ payment accounts through online interfaces.
This allowed both retail and corporate customers to use licensed TPPs to support managing their payments
services with their banks. The European Banking Authority (EBA) then published a set of Guidelines,
Regulatory Technical Standards (RTS) and Opinions to drive the technical implementation of the PSD2 and to
specify the conditions that need to be met in order for banks to restrict access to payment accounts
exclusively through dedicated interfaces (APIs).
The Interchange Fee Regulation (IFR) aimed at fostering the competition in the market of EU card payments
by introducing caps for hitherto high interchange fees for consumer debit and credit cards, therefore setting
harmonized ceilings for interchange fees for consumer cards in the EEA. Overall, major positive results have
been achieved through the implementation of the IFR. Notably, interchange fees for consumer cards declined
and this decline was reflected in reduced merchants' charges for card payments, resulting ultimately in
improved services to consumers or lower consumer prices. Additionally, market integration improved through
the increase in cross-border acquiring activities, although their uptake remains quite limited. The Commission,
as part of the mandatory review of the IFR, has published a report concluding, inter alia, that major positive
results have been achieved through the implementation of the IFR, including but not limited to reduced
merchants’ charges resulting ultimately in improved services to consumers or lower consumer prices and
enhanced market integration. Given the positive impact of the IFR and the need for more time to see the full
effects of the Regulation, the report is not accompanied by a revised legislative proposal.