Access to payment accounts under PSD2: which accounts are in scope?

Whats new under PSD2?

The revised EU Payment Services Directive (PSD2) caters for the possibility of third party service providers having access to payment accounts held at other payment service providers, the so-called account servicing payment service providers (read: banks). In this regard, PSD2 makes a distinction between two types of services: payment initiation services and account information services.

Whats the difference between payment initiation services and account information services?

A payment initiation service is a service to initiate a payment order with respect to a payment account held at another payment service provider. An ‘account information service’ is an online service to provide consolidated information on one or more payment accounts with either another payment service provider or with more than one payment service provider.

Does a contract need to be in place in order to have account-access?

Banks are - in principle - obliged to provide access to providers of payment initiation or account information services provided that the relevant payment accounts are accessible online and the third party service provider is duly licensed. Banks may not require contracts with the third party service provider in order to have account-access.

Which accounts qualify as payment accounts?

So, if we take the mandatory access to payment accounts as a starting point, it is interesting to further determine which accounts qualify as payment accounts. Banks should do this exercise to assess which accounts should be opened up to third party service providers.

As under the current PSD, PSD2 qualifies a payment account as an account held in the name of one or more payment service users which is used for the execution of payment transactions. This is not very precise. Earlier guidance in the context of PSD is however helpful.

Reference is first made to the Q&A of the European Commission on the PSD (http://ec.europa.eu/finance/payments/docs/framework/transposition/faq_en.pdf). The Commission explains that the definition of payment account covers all accounts where the holder can place and withdraw funds without any additional intervention or agreement of his payment service provider such as current accounts.

What about combined payments accounts?

The Commission clarified that when one account combines mortgage, saving and payment facilities in order to reduce the overall mortgage balance, this should be considered as a payment account within the meaning of the PSD as far as it is used for making payment transactions.

What about savings accounts?

The Commission expressed that a saving account where the holder can place funds whenever he wants, without having to sign a new contract for each new placement, and is also able to withdraw funds whenever he likes without any restrictions (e.g., penalties for not having respected the term agreed or administrative charges) should be considered as payment account for the purposes of the PSD.

For fixed term deposits this is different. If the payment service user has made a lump sum deposit and he cannot make any withdrawals from the account until maturity without incurring in loss of interest or other penalties as agreed in the contract (e.g. closure of the account) the account shall not qualify as payment account.

The views of the FCA under the current regulations

The UK Financial Conduct Authority (FCA) expressed in its handbook the view that when determining whether or not an account is a payment account, it is appropriate to focus on its underlying purpose (https://www.handbook.fca.org.uk/handbook/PERG/15/3.html?date=2016-02-03).

The FCA finds the following factors relevant:
• the purpose for which the account is designed and held out;
• the functionality of the account (the greater the scope for carrying out payment transactions on the account, the more likely it is to be a payment account);
• restrictive features relating to the account (for example, an account that has notice periods for withdrawals, or reduced interest rates if withdrawals are made, may be less likely to be a payment account);
• a limited ability to place and withdraw funds unless there is additional intervention or agreement from the payment service provider (this will tend to point more towards the account not being a payment account); and
• the extent to which customers use an accounts payment service functionality in practice.

Accordingly, in the FCAs view, payment accounts can include:
• current accounts
• e-money accounts
• flexible savings accounts
• credit card accounts
• current account mortgages

The FCA also states that only the features of the account used for the purpose of making transactions, to which the regulations apply, fall within scope. For example, in the case of a current account mortgage, the mortgage element of the account would be out of scope, albeit that a mortgage payment from the current account would be subject to the regulations.

What to do in light of PSD2?

The fact that the definition of payment account has not been further clarified under PSD2, will without any doubt create interesting (legal) discussions between banks and third party service providers. The latter category will obviously try to get as many online accounts in scope.

Banks will have to consider which accounts are at stake. XS2A will not only be relevant for banks that (only) offer online savings accounts. Many other accounts may be in scope! For more information or advice, please contact Arno Voerman.

About Arno Voerman

Arno Voerman is a FinTech lawyer/regulatory partner with Van Doorne N.V. in Amsterdam. He has a special focus on FinTech (payments, cards, consumer credit, e-money, lending etc). He advises Dutch and foreign payment service providers, FinTech companies and investors on various regulatory matters (including license applications, AML/CFT issues and disputes with the Dutch regulators). He also drafts (cooperation) agreements and general terms and conditions.