Payment Services Directive and Regulation on Interchange Fees (PDS2 and MIF) Commission proposal for PSD 2 and MIF Regulation Parliment adopt texts on PSD2 and MIF Directive & Regulation July 2013 April 2014 Overview On 24 July 2013, the European Commission published proposals for a revised Payment Services Directive (‘PSD 2’) and a Regulation on interchange fees for card-based payment transactions (Multilateral interchange fees) (MIF). The proposed Directive aims to facilitate and render more secure the use of low cost internet payment services by including within its scope new ‘payment initiation services’ (services operating between the merchant and the purchaser’s bank that allow for cheap and efficient electronic payments without the use of a credit card). These service providers will now be subject to the same standards of Regulation and supervision as all other payment institutions. The proposed Directive is also intended to give consumers increased protection against fraud, possible abuses and payment incidents. Consumers will be required to face only limited losses. The proposed Regulation on interchange fees, combined with the revised Payment Services Directive, will introduce maximum levels of inter-change fees for transactions based on consumer debit and credit cards. The Regulation will ban surcharges on debit and credit cards. During a transition period of 22 months, caps on interchange fees for these types of cards will apply to cross-border transactions. Caps are proposed at 0.2% of the value of the transaction for debit cards and 0.3% for credit cards. After the transition period, these caps will also apply to domestic transactions. Certain cards will be excluded from the interchange fees caps (mainly commercial cards issued to businesses and three party schemes). Latest news The Greek Presidency published a compromise text on 30 June 2014 but failed to agree a General Approach on the Directive (PSD 2). Council Working Party meetings (attachés and experts) for PSD 2 took place on 9 and 25 July 2014 and 16 September A further Council Working (attachés and experts) will take place on 29 September (attachés only). It is anticipated that agreement will be reached on a General Approach by October The Italian Presidency would like to achieve a General Approach on Multilateral Interchange Fees Regulation (MIF). An experts meeting on MIF took place on 14 July in Brussels. The last MIF financial attachés and experts level meeting took place on 9 September The European Parliament adopted the Economic and Monetary Affairs (ECON) Committee reports but postponed the vote on the legislative resolution, so it has not gone to the first reading in Parliament yet. The Parliament has published the texts on the PSD 2 and the MIF Regulation, as adopted by plenary vote on 3 April. Pablo Zalba Bidegain, MEP (SP, EPP) will continue as Rapporteur on MIF going forward (e.g. for the EP term ), whereas Rapporteur responsibilities associated with the Payment Services Directive (previously carried out by Diogo Feio, [IT, EPP] who was not re-elected) are assigned to Tajani Antonio (EPP, IT) for this Parliamentary term.reports