In addition to regulatory requirements, payment service providers shall also comply with civil law requirements, which can be found in the German Civil Code (Bürgerliches Gesetzbuch “BGB”). The following is a brief overview of the essential civil law requirements.
Information requirements
Payment service providers shall provide payment service users with certain information at different times.
Before the payment service user signs the agreement, the payment service provider shall provide the information listed in Article 248 Section 4 Introductory Act to the German Civil Code (Einführungsgesetz zum BGB “EGBGB”) on a durable medium. Article 248 Section 4 EGBGB contains, inter alia, information on the payment service provider, fees and communication with the payment service provider.
Before a payment transaction is executed, the maximum execution time and the charges to be levied on the payer shall be communicated, see Article 248, Section 6 EGBGB.
After execution of a payment transaction, the payment service provider shall provide the payment service user with the information specified in Article 248 Section 7 EGBGB (payment service user as payer) or Article 248 Section 8 EGBGB (payment service user as payee).
During the period of the agreement, the payment service provider shall inform the payment service user without undue delay if the information provided on the payment service provider or the interest rates have changed to the detriment of the payment service user.
The information requirements are eased in the case of low-value payment instruments pursuant to Section 675i (1) BGB, electronic money and single payment service agreements under Section 675f (1) BGB, see Article 248 Section 11 et seq. EGBGB.
Authorisation of the payment transaction
A payment transaction requires authorisation by the payment service user. The method of authorisation shall be agreed between the payment service user and the payment service provider (e.g. via T&C).
Obligations relating to payment instruments
Payment service providers issuing payment instruments (e.g. payment cards) shall execute the following due diligence obligations regarding the payment service user:
- making personalised security features (e.g. PIN) accessible only to the person entitled to use them
- no sending of unsolicited payment instruments,
- enabling a free theft/fraud report,
- unblocking of payment instruments at the request of the payment service user,
- preventing any use of the payment instrument after the theft/fraud has been reported
- and enabling the payment service user to provide proof of the theft/fraud report if requested by the payment service user.
Execution of payment transactions
Sections 675n to 675t BGB contain civil law provisions relating to the execution of payment transactions, some of which are described below and are particularly relevant in practice.
According to Section 675o (1) BGB, the payment service provider shall inform the payment service user without undue delay, and no later than one business day after receipt of the payment order, of the refusal of the payment order and, where applicable, of the reason for refusal. An authorised payment order shall not be refused if the execution conditions agreed are met and the execution does not breach other legal provisions.
The payer’s payment service provider shall ensure that the payment amount is received by the payee’s payment service provider at the latest at the end of the business day following receipt of the payment order, see Section 675s (1) BGB. For non-euro payment transactions within the EEA, the payer and his payment service provider may agree on a maximum period of four business days.
If the payee initiates the payment transaction, the payee’s payment service provider shall transmit the payment order to the payer’s payment service provider within the time limits agreed between the payee and his payment service provider. In the case of a direct debit, the payment order shall be transmitted in sufficient time to allow settlement on the due date specified by the payee, see Section 675s (2) BGB.
The payer’s payment service provider and all intermediaries involved in the payment transaction are obliged to transfer the full amount of the payment order to the payee’s payment service provider, see Section 675q (1) BGB. The payee’s payment service provider may only deduct fees due to the payee from the amount transferred prior to crediting the amount if this has been agreed with the payee.
Prohibition of surcharging
According to Section 270a BGB, no fee shall be agreed with debtors of monetary claims for the use of a SEPA basic direct debit, a SEPA B2B direct debit, a SEPA credit transfer or a payment card (here only for payment transactions with consumers). This prohibition applies not only to payment service providers but to all creditors of monetary claims.
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