Payment services directive
On 1 November 2009 the payment services directive (“PSD”) is due to be implemented across all 27 European Union member states and 3 countries of the European Economical Area (Iceland, Lichtenstein, Norway).
The PSD provides a legal framework that aims at increasing consumer protection and market transparency and at enhancing competition in payment markets by removing entry barriers. It codifies mandatory information and conduct of business requirements for payments as well as rights and obligations of each party of a payment service.
In Luxembourg, the Commission de Surveillance du Secteur Financier is the primary competent authority responsible for supervising firms whose operations are within the scope of the PSD.
Over the past few months we have been working on some of the largest PSD implementation programs in the banking and credit card sectors and it has become obvious that meeting the implementation deadline will constitute a major challenge for the industry.
The urgency of implementing the PSD has been overshadowed by the turbulent financial environment, which has shifted the bank’s organisational focus and resources towards other areas. As a consequence, many firms have fallen behind in their PSD preparations and some have yet to fully understand the implications of the PSD for their businesses.
Click here to download our "PSD implementation" presentation
Challenges for firms
The PSD requires a high volume of potentially complex changes to be made to existing systems and customer documentation. For example, banks operating current accounts will need to review and amend every set of terms and conditions and all systems supporting those accounts will need to be updated to ensure PSD compliance.
Our experience of PSD projects has given us a number of insights into industry issues which may be of interest to you. For example:
- To comply with the PSD requirement that cash placed on a payment account is immediately available to a customer, firms need to alter their batch-based systems where accounts are currently only updated overnight.
- The PSD contains an opt-out option from a range of information requirements for its corporate customers. In order to take advantage of this provision, firms face a significant data and systems challenge to maintain accurate records of customers covered by this definition.
These changes represent a significant logistical exercise and will challenge firms to source the necessary skills to achieve compliance by the implementation deadline of 1 November 2009.
Deloitte and the PSD
Deloitte’s experienced team of PSD experts has considered the impact of the Directive for your business in the following key areas:
- Regulation and compliance,
- Systems and technology,
- Processes, procedures and training,
- Strategy, revenues and risk.
Our delivery team includes consultants having concrete PSD experience as well as payment systems and transaction banking expertise. With our experience of PSD implementation work in global banking and credit card firms we believe that we are well positioned to assist clients with their PSD programs.
