Recent regulatory developments focussed on the payments sector. See also our General regulatory news in the Related Materials links.
- Payment Services and Electronic Money (Amendment) Regulations 2020 published
- Application of PSD2 to contactless payment cards: ECJ case
Payment Services and Electronic Money (Amendment) Regulations 2020 published
The Payment Services and Electronic Money (Amendment) Regulations 2020 (SI 2020/1275) have been published, together with an explanatory memorandum. The Regulations amend the Electronic Money Regulations 2011 and the Payment Services Regulations 2017 to apply sections 93(4) and 233 to 236 of the Banking Act 2009, with modifications, to authorised electronic money institutions, small electronic money institutions, authorised payment institutions and small payment institutions. This will allow HM Treasury to make regulations to modify insolvency law with respect to these institutions, including setting up a bespoke insolvency regime applicable to them.
The Regulations come into force on 8 December 2020.
HM Treasury did not conduct an open consultation on the Regulations, but it did informally consult some affected parties, including the FCA, the Insolvency Service and a number of insolvency practitioners and trade associations representing payments and electronic money institutions. Stakeholders supported the proposed changes.
HM Treasury will run a full open consultation on the regulations and rules that will create the Special Administration Regime for payments and e-money firms.
Application of PSD2 to contactless payment cards: ECJ case
The Court of Justice of the EU (ECJ or CJEU) has handed down its judgment in DenizBank AG v Verein für Konsumenteninformation (Case C-287/19). This case involved a request for a preliminary ruling relating to the application of the revised Payment Services Directive (PSD2).
Banks and other payment service providers will be relieved to hear that the ECJ did not follow the Advocate General's April 2020 opinion that tacit (or passive) acceptance of changes to terms and conditions in payment services contracts could only be available for "non-essential changes". Instead, the ECJ found that PSD2 does not restrict the type of terms that can be changed by tacit consent, but where the payment service user is a consumer the Unfair Terms in Consumer Contracts Directive applies. However, the Court has confirmed the Advocate General's other finding that contactless functionality is a separate payment instrument.
Read more in our briefing: CJEU rules on scope of variation provisions under PSD2.