New EU legal framework overregulates payments
Association of German Banks warns of disadvantages for consumers

01 December 2005 – The European Commission has today published its proposal for a directive on payment services in the EU internal market. The Association of German Banks in principle supports the creation of a legal basis for the Single Euro Payments Area (SEPA). In view of the envisaged degree of detail, however, they see a danger of overregulation.

The new legal framework should confine itself to areas in which there is a real need for regulation, in the Association of German Banks’ view. The pan-European SEPA direct debit, for example, requires a common legal basis because of the serious differences existing at present between member states’ national legal systems. The Association of German Banks fears, however, that this proposal will actually preclude the introduction of the SEPA direct debit because it fails to make an adequate distinction between a direct debit and credit transfer system.

The Association of German Banks rejects rules which go beyond eliminating obstacles to payments in the internal market or removing competitive distortions. It believes the unbalanced rules on liability, the extension of the directive’s scope to third-country currencies and payments to or from third countries, as well as the excessive information requirements, would be counterproductive and hamper the realisation of SEPA.

The requirement for payments in euros within the EU to be processed in one-sixth of the time currently allowed is totally excessive, in the opinion of the Association of German Banks. Though it is technically possible to make the necessary infrastructure available, the associated costs would be disproportionately high. Interference of this kind in the banking industry’s product range would discourage innovation. Consumers can already choose between making a standard payment and paying a premium for express processing.