EU banks fail to thwart next-day payments rule

By Anna McLauchlin

Banks should ensure that intra-EU payments arrive no later than a day after the transaction, but would have longer to notify consumers about any irregular activity on their bank accounts, according to the most recent draft of the Payment Services Directive (PSD) from the Austrian presidency.

The latest position was adopted on Monday (22 May) in a discussion over the consumer rights in the PSD, which lays out the legal framework for banks to operate payments with the aim of making cross- border payments as quick and cheap to make as domestic ones.

Contrary to the three days being demanded by Europe's banks, member states are backing the European Commission's proposal that any payment should be delivered to the target account the day after the transaction has been made - known in the jargon as 'D+1'.

But they support calls from French centre-right deputy Jean-Paul Gauzes, Parliament's draftsman, to give banks an extra two years to comply with the new rule - which mean that D+1 would apply from 2012 rather than 2010.

The presidency is also backing the Parliament's view that a bank should have to notify an account holder of any unauthorised transaction, error or irregularity in payments made from his or her account. But they should have 18 months to do so rather than the six months suggested by Gauzès. The Commission did not draft a position on this issue.

The Austrians will hold a meeting on 21-22 June to discuss the directive and their position vis-a-vis the Parliament, before handing the dossier over to the Finnish presidency in July.

MEPs will hold a first exchange of views on Gauzès's report on Tuesday (30 May) in the economic and monetary affairs committee.

Article examines a new draft of the Payment Services Directive (PSD) from the Austrian Presidency of the EU. According to the proposal banks should ensure that intra-EU payments arrive no later than a day after the transaction, but would have longer to notify consumers about any irregular activity on their bank accounts.