The proposals for the Payment Services Directive 3 (“PSD3”) and the Payment Services Regulation (“PSR”) continue to take shape. On February 14, 2024, the European Parliament’s Committee for Economic Policy (“ECON”) voted on the drafts of the two legislative texts. The reports of the plenary session and the corresponding amendments to the drafts of PSD3 and PSR are now available. Among other things, there have been changes to the scope of application of the PSR for payment transactions in connection with electronic communication services, which we would like to take a closer look at.
Status quo: Exception for value-added services under PSD2
Article 3 l) PSD2 currently contains a provision according to which the Directive does not apply to certain payment transactions: According to the preamble to the PDS2, the exception is intended in particular to allow billing via the operator or purchases billed directly via the phone-bill if they are provided in addition to the electronic communications services for a subscriber of the network or service (so-called value-added services). Ringtones and premium SMS services are cited as examples of such value-added services, while the development of new business models based on the sale of digital content and voice services in the low-value range is explicitly mentioned.
In order to ensure the focus on small amounts, the exemption for value-added services in PSD2 provides for the following thresholds:
The value of a single payment transaction does not exceed EUR 50 and
- – the cumulative value of the payment transactions of an individual subscriber does not exceed EUR 300 per month, or
- – the cumulative value of payment transactions per month does not exceed EUR 300 where a subscriber pre-funds its account with the provider of the electronic communications network or service.
Exemptions for value-added services under German Law
The exemption was implemented in German law in Section 2 para 1 no. 11 of the Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz/ – “ZAG”). The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufischt – “BaFin”) has specified the calculation method of the EUR 300 limit in the BaFin bulletin on the ZAG dated February 14, 2023 under Section C. XI.: According to this, a statistical approach is to be taken on the basis of validly determined historical billing data and on this basis the calculation is to be carried out per subscriber number and not necessarily per subscriber. A confidence level of at least 99% over the calendar year must be guaranteed.
What changes does the PSR bring regarding value-added services?
With regard to the above-mentioned regulation, the EU legislative proposal envisages both systematic changes and changes to the thresholds.
Transparency and information requirements for all categories of payment service providers, as well as exemptions, will be regulated in the PSR. As this is an EU regulation with direct effect, it does not need to be implemented at the national level.
In terms of content, the wording of Art. 2 lit. k) PSR is the same as in the previous regulation, although the respective thresholds have been raised:
The value of a single payment may not exceed EUR 60 and
- – the cumulative value of the payment transactions of an individual subscriber may not exceed EUR 360 per month, or
- – the cumulative value of payment transactions per month must not exceed EUR 360 if a subscriber pre-funds its account with the provider of the electronic communications network or service.
The calculation method is not described in more detail in the draft of the PSR, so it remains to be seen whether the method currently described by BaFin will also apply under the PSR. The EU Commission and the European Banking Authority (EBA) will issue delegated regulations and interpretative notes in the form of guidelines on individual provisions.
What happens next?
The plenary of the EU Parliament is expected to vote on the PDS3 and the PSR in April 2024 in order to complete the first reading without the Council’s approval. Of course we will keep an eye on the further progress and report on the developments.
