On March 25, 2021, The German Federal Supreme Court (Bundesgerichtshof, BGH) ruled on appeal that certain transaction surcharges for the use of payment services offered by online payment service providers Sofortüberweisung, part of the Klarna Group, and PayPal do not violate the prohibition on surcharges for SEPA payment transactions.1
This prohibition is set out in Art. 62 (4) of the Second Payment Services Directive (PSD2), which was transposed into German law by Section 270a of the German Civil Code (Bürgerliches Gesetzbuch, BGB). The judgment is therefore of interest not only for Germany, but for the entire EU payment services market.
In the appeal case brought before the BGH, the claimant, a consumer protection organization, had originally filed for a cease and desist order against the defendant, a long distance bus operator, for an alleged violation of the ban on surcharges. As a means of payment, customers of the defendant could choose between payment by debit card, credit card, Sofortüberweisung and PayPal. For the latter two, the defendant would charge an additional fee depending on the fare booked. Both the processing of Sofortüberweisung and PayPal involves payments using SEPA credit transfers.
The BGH held that the additional fees do not violate Section 270a BGB, because the additional fees were not charged for the credit transfer but rather for the involvement of a payment service provider (PSP) that provides additional payment services and credit checks.
In more detail, the BGH argued that the ban on surcharges only applies to those that are levied for the SEPA payment transaction itself (as defined in Regulation (EU) 260/2012, the SEPA Regulation), not to any transactions that involve a SEPA payment transaction. A SEPA payment transaction in the form of a credit transfer is defined as “a national or cross-border payment service for crediting a payee’s payment account with a payment transaction or a series of payment transactions from a payer’s payment account by the PSP which holds the payer’s payment account, based on an instruction given by the payer” (Art. 2 (1) SEPA Regulation).
Sofortüberweisung, however, does not act as a payment service provider which holds the payer’s payment account. Rather, it provides payment initiation services, which means that it initiates the crediting of a payer’s payment held by the payer’s PSP. This initiation is an additional service for which the payee can charge a fee. In addition, it provides credit checks. According to the BGH, it is irrelevant whether Sofortüberweisung maintains a contractual relationship with (and is paid by) the payee only or also with the payer’s PSP. Likewise, it is irrelevant that the payer may have the (wrongful) impression that the surcharge is levied for the SEPA credit transfer itself, and not for the involvement of Sofortüberweisung.
With respect to PayPal, the court held that such payments are effected by electronic money, which is transferred from the payer’s PayPal account to the payee. The BGH refers to Art. 1 (2) (f) of the SEPA Regulation, which excludes electronic money transactions from the scope of the SEPA regulation unless such transactions result in a credit transfer or direct debit to and from a payment account identified by a Basic Bank Account Number (BBAN) or International Bank Account Number (IBAN).
The BGH noted that if the balance of the payer’s PayPal account is not sufficient to settle a transaction, money from a payment account (or from the credit card) of the payer is transferred to PayPal, and such transfer may include a SEPA payment. Due to this close link between the electronic money payment from the payer’s PayPal account to the payee on the one side and the SEPA payment, the BGH argues that it is questionable whether the exclusion of electronic money transactions pursuant to Art. 1 (2) (f) of the SEPA Regulation applies. However, even in such a case, the surcharge is not levied for the SEPA payment, but for the involvement of PayPal as an additional payment service provider.
The BGH refrained from presenting the case to the European Court of Justice, arguing that the interpretation of Article 62(4)PSD2 left no room for uncertainty. In practical terms the BGH judgment means that merchants are free to as to when and how they pass surcharges for services provided in addition to SEPA payment services on to their customers, even if such services are closely related to SEPA payment services.
- BGH, judgment dated 25 March 2021 (I ZR 203/19), available here.