The German Payment Accounts Act (Zahlungskontengesetz, ZKG) already entered into force in 2016. The key part of the law is the basic account, which gives people living in the EU the right to an account with basic functions. This also applies to refugees and in order to ensure this, even the Anti-Money Laundering Act was amended to include more types of documents that are permissible for identification. The basic account ensures participation in society and was therefore rightly praised in the press.
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However, the problematic and largely unnoticed part of the Payment Accounts Act is now entering into force. This concerns Sections 5-15 ZKG, i.e. the information obligations as well as the provisions relating to comparability. It sounds good at first that consumers should be sufficiently informed and that offers made should be comparable. Looking at this in more detail, however, it transpires that this is a mess as the German legislator has overstepped the mark and also appears to be hostile to technology.
Information obligations and comparability under the Payment Accounts Act: a detailed criticism
The Payment Accounts Directive (2014/92/EU), on which the Payment Accounts Act is based, requires certain information obligations of payment service providers offering payment accounts that provide certain functions. The idea behind this is that consumers should be able to easily obtain information about different accounts on offer. According to the Directive, these functions are:
- the deposit of an amount of money into a payment account,
- the withdrawal of cash from a payment account,
- the execution and receipt of payment transactions, including bank transfers, to and from third parties.
This describes quite well what is commonly known as a current account.
However, the German legislator has gone beyond this and obliges all payment service providers offering any type of payment account in Germany to comply with the regulations. A payment account within the meaning of the Payment Account Act is any account in the name of one or more consumers that is used for the execution of payment transactions. According to the legislative explanations, exceptions apply only to savings accounts and credit card accounts which either are not used to make payments or only serve as repayment accounts.
This means that this includes almost all other payment accounts, such as e-money accounts or accounts for micropayments, which are common for the payment of newspaper articles, for example.
The German legislator therefore takes the idea of creating comparability to an absurd level. The result is that payment accounts are made comparable which are not comparable at all, because some of them do not have the aforementioned functions. After all, who would want to compare his payment account for micropayments with his current bank account or even switch from one to the other?
What does this mean in practice? The highlights
Information on fees
Payment service providers must make information on fees available to their customers prior to entering into a contract. This must contain the relevant payment services (even if these are not offered at all). The German financial regulator BaFin determines what relevant payment services are and publishes them in a list of the most representative services. These include, for example, bank transfers, direct debits, issuing credit cards, authorised refusals of direct debits, cash withdrawals from ATMs, etc.
This information on fees does not only have to be made available on the website, but the customer needs to have been notified thereof. . This means that customers must receive it in text form by e-mail in an electronic mailbox or by letter – and before the contract is concluded. Consumers will be very pleased that they first of all have to provide their e-mail address in order to obtain an overview of (not all relevant) fees before they can make a payment…
Incidentally, the information on fees must not be optimised for mobile devices either, but it has to comply with the requirements of the EU Commission. To this end, BaFin provides a template for the information on fees that complies with these requirements. It is worth taking a look at this because it is hard to give a better example of why digitalisation is not progressing in Germany. A Word table converted into a PDF, which looks as if someone had just learned how to use the most common Office programs and who obviously only had a “paper form” in mind when creating it, not smartphones, User Experience or even something like Design Thinking.
To put it bluntly: a consumer who wants to read a newspaper article on his smartphone and pay for it online with a payment account is therefore forced to receive an e-mail prior to doing so with a non-smartphone-optimised PDF telling them that withdrawing cash from an ATM with this payment account does not cost anything, since it is not offered either. I suspect that our newspaper reader will be confused rather than informed.
Fee statements
In addition to the information on fees, customers must also be provided with a fee statement at least once a year as well as upon termination of the contract. A periodic account statement is not sufficient. This statement also needs to comply with the requirements of the EU Commission – and of course BaFin also provides a compliant template for the fee statement.
Standard terms
Payment service providers are also obliged to use predefined standard terms in their communication with customers (i.e. as part of their general terms and conditions, information or marketing). This means, for example, that a payment provider for P2P payments can no longer simply write “send a payment”, but this has to be called “credit transfer”. This confuses many customers as they will think of a SEPA credit transfer but the German legislator does not seem to have been worried about that. All offers should be made comparable. Once again, this is generally a good idea, if only they were capable of being compared. The consumer is therefore told in the name of consumer protection that an apple is now called a pear – and that they are actually the same thing.
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