Other than this piece easily having the longest title of any posting we have reviewed, the author goes on to explain yet another recently enacted payments reg by the EU, this one an update to the 2001 cross-border payments directive. The new directive, (EU) 2019/518, also referred to as CBPR2, basically provides for non-euro currency member state PSPs to be charged the same for payments into euro denominated markets as within their own market. It all gets a bit wordy and complicated, as anyone who reads these directives will know. However, it closes a gap from the original directive, and is done with any eye towards fairness in competition. Must be tough to keep up with all this stuff.
‘The CBPR2 seeks to address this situation as it introduces the full transparency of currency conversion charges and sets standard requirements for payments at the point of sale (POS) or at ATM machines, as well as credit transfers. This, guides consumers to compare the cost of different conversion options and make an equitable and informed choice2. One of the most important changes brought about by the CBPR2 is that charges levied by PSP’s for cross-border payments denominated in euros will have to be the same as those for “national payments of the same value in the national currency of the Member State” in which the PSP is located (which may either be euros or another currency).’
One can read through the directive should one be interested in having yet another headache in these tough times, but we’d suggest just browsing the article, in which the author synthesizes key points before an individual’s eyes have a chance to glaze over. Among those are disclosures by issuers for all card based transactions as well as similar requirements by PSPs for credit transfers that are online or via mobile devices. The author does go on to point out that some definitional things remain to be cleared up. One of the points of the piece is to remind all that although CBPR2 went live on April 19, 2020, the EC recommends that competent authorities in each market basically take a ‘hands off’ approach to enforcement during COVID-19.
‘the European Commission favoured flexible enforcement by National Competent Authorities in order to preserve “the stability and continuity of online banking interfaces under the present circumstances” in view of the extraordinary circumstances relating to COVID-19.’
Overview provided by Steve Murphy, Director, Commercial & Enterprise Payments Advisory Group at Mercator Advisory Group.