- Pierre Berger
- Isabelle Van Biesen
- Simon Landuyt
- Pierre Proesmans
- Pauline Kustermans
- Stephanie Liebaert
- Caroline Fabri
- Evelyn Waumans
- Julien Sad
The implementation of the revised Payment Services Directive 2015/2366 (hereinafter PSD II) into Belgian law is now final: (i) the Act of 11 March 2018 implements the prudential aspects of PSD II (ie licensing and supervision of payment service providers) and (ii) the Act of 19 July 2018 implements PSD II's conduct of business rules. The main purpose of this client alert is to provide a summarizing overview of these two implementing acts. Since PSD II does not allow “goldplating”, almost all provisions have been literally copied from the text of the Directive. This is why the present alert is focused on the scope of application of both implementing acts, further clarifications given thereunder (and in the preparatory works) and on their derogations from PSD II.
2. The Act of 11 March 2018
On 26 March 2018, the Act of 11 March 2018 regarding the legal status and the supervision of payment institutions and electronic money institutions, the access to the undertaking of payment service provider and to the activity of issuing electronic money, and the access to payment systems has been published in the Belgian Official Gazette, and has immediately entered into force.
This Act implements the prudential aspects of PSD II and repeals and replaces the Act of 21 December 2009.
2.1. Authorised or registered?
Book II of the Act partially retains the structure of the Act of 21 December 2009. However, the Act now also contains a clear distinction between “authorised payment institutions” and “registered payment institutions”, which are treated in two different Chapters of Title II. Every Chapter distinguishes the respective authorisation procedure, conditions for obtaining a licence or registration and conduct of business rules.
Authorised payment institutions are subject to the provisions of Chapter I. These institutions offer payment services in Belgium which trigger a licence requirement with the National Bank of Belgium (hereinafter the NBB). These are the payment services referred to in points 1 to 7 of Annex I.A (ie all payment services except for “account information services”).
Registered payment institutions are subject to the provisions of Chapter II. These institutions offer payment services involving risks that are considered less important for the market and the users than the risks associated with the activities of authorised payment institutions. These institutions are therefore exempt from the application of some of the provisions applicable to authorised payment institutions under Chapter I, to be determined by the King. Since they are subject to less strict regulations, they are not required to obtain a licence but merely have to be registered with the NBB.
Within the category of registered payment institutions, a further distinction is made between “limited payment institutions” and “payment institutions offering account information services”. “Limited payment institutions” are payment institutions which offer one or more of the payment services as referred to in points 1 to 5 of Annex I.A, but with a limited volume of activities (ie monthly average of the total value of payment transactions to be executed in the coming 12 months is lower than 1 million EUR).
This category of institutions is not new; Article 48 of the Act of 21 December 2009 was already devoted to this type of institution. As was the case before, these institutions cannot benefit from a European passport.
The offering of “account information services” is discussed under section 2.3. below.
2.2. Offered “in Belgium”
The act itself does not specify when payment services are deemed to be “offered in Belgium”, but the preparatory works of the Act of 10 December 2009, now incorporated in Book VII, Title 3 (“Payment Services”) of the Economic Law Code, provide some clarification.
The preparatory works provide that a payment service is provided in Belgium, if a payment service provider, directly or through mediation, wishes to enter into a contractual relationship with potential payment service users in Belgium. For this purpose, the payment service provider must develop activities in Belgium or direct such activities, regardless through which means, towards Belgium or various countries, including Belgium.
With respect to the provision of financial services by foreign financial institutions, the NBB developed a practice, which is generally in line with the Commission’s interpretative communication on the freedom to provide services and the interest of the general good in the Second Banking Directive, published on 20 June 1997, except for the influence of distant marketing or distant offering of a financial service on licensing requirements.
According to the NBB, it should be analysed case-by-case to which extent the provision and marketing of financial services to Belgian customers triggers the applicability of Belgian law. Financial services are being offered “in Belgium” if:
- The financial services are delivered in Belgium, or
- The offshore financial institution actively solicits “services” or “orders” from clients in Belgium by means of remote sales and marketing techniques or advertising
The NBB holds the view that financial services are offered in Belgium, not only when the actual service (to be understood as the “characteristic performance” of the service) takes place on the Belgian territory, but also if the offshore financial institution solicits orders from Belgian residents in Belgium by means of remote sales techniques (e.g., cold calling, post, fax or e-mail), advertising or visits of relationship managers soliciting “services” or “orders”. Any active solicitation of Belgian clients directly or via intermediaries triggers Belgian licensing requirements.
There will, however, always exist a grey area between activities clearly requiring a licence and activities not requiring a licence. This should be analysed on a case-by-case basis.
2.3. Payment initiation and account information
As is the case under PSD II, the Act of 11 March 2018 defines and regulates two new types of payment services, ie payment initiation and account information services, which have been added to the list of payment services in Annex I.A of the Act.
Firstly, a payment initiation service is defined under the Act as “a service to initiate a payment order at the request of the payment service user to debit an account held by the payment service user with another payment service provider, and to credit a different account”. This definition slightly differs from PSD II, where this type of service is defined as “a service to initiate a payment order at the request of the payment service user with respect to a payment account held at another payment service provider.”
When a person wishes to offer payment initiation services in Belgium, it is required to obtain a licence from the NBB. There are several new application requirements for obtaining a licence, in line with PSD II. For example, all applications now must include a description of the process in place to file, monitor, track and restrict access to sensitive payment data. There are also some specific additional requirements for payment initiation service providers, e.g., they must prove that they hold a professional indemnity insurance or a similar guarantee.
The definition of an account information service has been copied from PSD II, i.e. “an online service to provide consolidated information on one or more payment accounts held by the payment service user with either another payment service provider or with more than one payment service provider”. As is the case under PSD II, the Act does not require that a licence be obtained in order to perform account information services in Belgium (to the extent that no other payment services are offered in Belgium). A mere registration with the NBB suffices. Several entities have started to offer account information services on the Belgian market in the past months, including the main Belgian banks.
The Act foresees a transitional regime, whereby legal persons under Belgian law providing payment initiation or account information services in Belgium before the date of entry into force of the Act, may continue to operate these services if they apply for a licence or registration within three months after the date of entry into force of this Act.
A first category of exemptions are the services that are never considered as payment services under the Act, which are listed in Annex I.B. These exemptions are mainly copied from the Act of 21 December 2009 and from PSD II. The preparatory works of the Act provide the following clarifications as to the scope of certain of these exemptions:
- Commercial agents:
An e-commerce platform that operates as an intermediary on behalf of buyers and sellers and that enters into possession of funds (or has control over these funds) in Belgium, should be considered as a payment service provider and should obtain a licence as payment institution.
- Technical service providers:
The exempted technical services are offered to payment service providers and imply that a contract is concluded with these payment service providers. This is the main difference with payment initiation and account information services, which imply that a service is offered to the users, and that a contract is concluded with such users. This is why it is specified that payment initiation and account information services do not fall within the scope of this exemption. •
- Automated teller machines (ATMs):
Services consisting of withdrawing cash through independent ATMs are not considered as payment services. However, providers offering such services will have to comply with the transparency provisions in PSD II, which will be transposed in Book VII, Title III (Payment Services) of the Economic Law Code. A second category of exemptions are services that are considered as payment services, but which are not subject to the provisions of the Act, provided that they are offered subject to certain conditions. Therefore, the Belgian legislator has decided to now list these exemptions in Articles 6 and 7, instead of in Annex I.B. In this way, it can be made clear that the provision of payment services in the context of the so-called exemption for “limited networks” or the “telecom” exemption qualifies for a special arrangement, provided that a number of conditions are fulfilled. When these conditions are no longer fulfilled, a licence or registration as a limited payment institution must be obtained for the provision of these services. These exemptions are copied from PSD II, but the preparatory works of the Act provide the following clarifications as to their scope:
- Limited networks:
The following examples are given of payment instruments that can only be used within a limited network: customer cards, fuel cards, membership cards, cards for public transport and parking cards.
The conditions for invoking this exemption have been refined under PSD II, and implemented by the Act. As regards condition 1°, the preparatory works specify that payment instruments that can be used for purchases from merchants included in an open list (which can be extended by the continuous addition of merchants accepting those instruments), can in principle not be considered as instruments that can be used within the framework of a limited network. Regarding the “instruments which can be used only to acquire a very limited range of goods or services” (ie condition 2°), the legislator states that this would entail the use of an instrument actually limited to a limitative number of functionally connected goods or services, regardless of the geographical location of the point of sale. The following examples are given of payment instruments complying with condition 3°: meal vouchers (“maaltijdcheques“) which are offered to employees at the request of an employer, or service vouchers (“dienstencheques") which are offered at the request of individuals and are covered by a specific legal framework in the field of tax or social security which aims to promote the use of such instruments.
In order to avoid abuse of this exemption, it should not be possible to use one and the same payment instrument for payment transactions for the purchase of goods or services within more than one limited network, or for the purchase of an unlimited range of goods and services. Payment service providers must submit a request for recognition as a limited network with the National Bank, where the volume of payment transactions of the past 12 months exceeds €1 million.
The digital content or telecom exemption has been implemented by the Act without goldplating. Telecom operators offering a payment service to their subscribers for the purchase of physical goods will no longer be exempted from the scope of PSD II / the Act. Telecom operators wishing to make use of this exemption must submit a request to the National Bank.
3. The Act of 19 July 2018
On 30 July 2018, the Act of 19 July 2018 amending and implementing certain provisions relating to payment services in several books of the Belgian economic law code was published in the Belgian Official Gazette. The provisions of this Act entered into force on 9 August 2018. However, given the potential impact of these rules on the contractual relationship between payment service providers and their clients, a transition period of four months as of the publication is granted to payment service providers to adapt their contractual documentation (art. 14 of the Act). Unlike the Act of 11 March 2018, this Act is not a stand-alone legal instrument. Its provisions are integrated into Book VII ("payment services") of the Economic Law Code (hereinafter the ELC).
3.1. Surcharge ban
In the past, merchants were allowed to charge an additional cost in case of a payment with a debit or a credit card. This will no longer be possible, since the Belgian legislator decided to completely ban the “surcharge” for the use of payment instruments (art. VII.30, §3 ELC).
The surcharge prohibition applies regardless of the type of payment instrument and includes, inter alia: - debit card transactions (e.g. Bancontact, Maestro or V-Pay)
- Credit card transactions (eg Mastercard, Visa, American Express or Diners Club)
- Payments made by payment cards issued by three-party card schemes (eg Amex)
- Other means of payment, such as non-EUR direct debits (eg PayPal)
- Moreover, the surcharge prohibition applies for both in-store and online purchases.
3.2. Provisions relating to the new payment services
The Act of 19 July 2018 introduces specific provisions relating to the provision of payment initiation and account information services into the ELC.
Some examples are:
- The payer has the right to make use of the services of a payment initiation service provider or an account information service provider (hereinafter third party providers or TPP's). The provision of payment initiation and/or account information services shall not be dependent on the existence of a contractual relationship between the TPP and the account servicing payment service provider for that purpose (art. VII.35 and 36 ELC). The TPP is allowed to access the payment account as soon as it obtained the client consent (art. VII. 35 and 36 ELC)
- If an unauthorised payment transaction is initiated by a payment initiation service provider, the account servicing payment service provider will be required to reimburse the client, no matter who is responsible for the unauthorised payment. If the payment initiation service provider is liable for the unauthorised payment transaction, it shall immediately compensate the account servicing payment service provider at its request for the losses incurred or sums paid as a result of the refund to the payer, including the amount of the unauthorised payment transaction (art. VII.43, §2 ELC)
3.3. Liability for unauthorised payment transactions
Under the PSD II regime, the payment service user is only liable for unauthorised payment transactions resulting from the use of a lost or stolen payment instrument for a maximum amount of 50 EUR, compared to 150 EUR under PSD I. However, the payment service user shall bear no losses as of the moment he reported the loss or theft of his payment instrument (art. VII. 44 ELC).
In any case, the payment service user shall bear all losses in the case of fraud or if they acted intentionally or with gross negligence (art. VII. 44 ELC). It should be noted that the Belgian legislator has opted for a stronger liability regime when the payment service provider does not offer strong client authentication. In this case, the payment service provider will have to bear all losses, except in the scenario of fraud by the payment service user (art. VII. 44 ELC).
Finally, the payment service provider shall bear full liability if the loss, theft or misappropriation of the payment instrument was not detectable to the payment service user prior to the execution of the payment (art. VII. 44 ELC). In the preparatory works, the Belgian legislator refers in this regard to the growing practice of "phishing" scams. Where the liability regime in case of phishing previously depended on the type of data disclosed or extracted (personalised security features or not), this now depends on "whether the payer could or could not detect the scam before payment was made".
In the case of an unauthorised payment transaction, the payment service provider has to refund the payer the amount of the unauthorised transaction immediately, and in any event no later than by the end of the following business day, after noting or being notified of the transaction, except where the payment service provider has reasonable grounds for suspecting fraud and communicates those grounds to the relevant national authority in writing. For Belgium, the competent authority is the FPS Economy (art. VII.43 ELC).
3.4. National payment transactions
In article VII.53 of the ELC, the Belgian legislator provides for a shorter maximum execution time for national payments than the maximum execution time required by PSD II. More specifically, all payments within Belgium should be executed on the same business day (D), whereas article 89 of PSD II stipulates that all payment transactions should be executed no later than by the end of the next business day ("D + 1").
3.5. Complaints handling
Payment service providers should ensure they provide written responses to clients' complaints within 15 working days. This is a shorter response timeframe than under PSD I, where payment service providers had 30 days time to answer to complaints (art. VII. 55/14 ELC).
Please get in touch to discuss how these new requirements apply to your company. We are happy to assist you with all formalities.
Contact DLA Piper : Tel: +32 (0) 2 500 15 00