Amendment of the Payment Services Act: Basic accounts and payment schemes
The amendment of the Payment Services Act is intended to implement the Payment Accounts Directive into the Polish legal system and to adapt Polish law to the Interchange Regulation. In addition to achieving compliance with EU regulations, the new provisions introduce a new type of regulated activity, as operators of payment schemes will be required to obtain approval from the head of the central bank.
On 21 October 2016 the Sejm adopted the Act Amending the Payment Services Act and Certain Other Acts. After the Sejm accepted some revisions by the Senate, the act was signed by the President and then published in the Journal of Laws (Dz.U. 2016 item 1997) on 9 December 2016.
Below we discuss the changes introduced by the amending act, but we address only the changes in the Payment Services Act, which primarily are intended to implement the Payment Accounts Directive (2014/92/EU, aka “PAD”) and to adapt the act to reflect entry into force of the EU’s Interchange Regulation (2015/751).
Implementation of PAD
Some of the provisions of the amending act are meant to implement PAD. The main goal of the directive is to eliminate barriers to growth of the retail financial services market connected with payment accounts and related services. This involves such solutions as imposing new informational obligations on service providers, specifying the procedure for switching accounts between providers, regulating the providing of an account comparison service, and the obligation to offer basic payment accounts.
New informational obligations. The amended Payment Services Act introduces new informational obligations, under which payment service providers will be required to:
- Provide the consumer a list of fees connected with operation of an account prior to conclusion of the account agreement
- Provide a consumer holding an account a breakdown of fees for services related to the account and the credit in the account, also reflecting interest accrued (at least once per year)
- Use in certain instances a uniform nomenclature determined pursuant to the act, referring to representative services connected with a payment account—for example in advertising of accounts and in account agreements.
Procedure for switching accounts. The new regulations establish rules for switching payment accounts between payment service providers based in Poland. The scope of the authorisation to be submitted by the consumer is specified, along with the information to be provided, the periods for actions to be taken by providers, and their liability for losses arising out of failure to comply with their obligations. The act also introduces certain solutions intended to facilitate the switching of accounts between providers in different countries, but these do not provide for a comprehensive procedure.
Online comparison of accounts. Pursuant to PAD, Poland must ensure consumers access to a website enabling comparison of the offers available on the payment accounts market for “representative services.” Under the amendment, such a comparison site may be operated by a private entity meeting criteria laid out in the act (chiefly involving independence and the range of information presented). If no private operator meets the statutory requirements, such a site will be operated by the Polish Financial Supervision Authority (KNF).
Basic payment accounts. Banks, credit institutions and branches thereof, as well as credit unions (SKOK), will be required to offer basic payment accounts. Only consumers not already holding another type of bank account will be entitled to open a basic account. Among other things, a basic account must enable at least 5 free bank transfers per month and the use of a payment card.
Implementation of Interchange Regulation
The amendment also introduces solutions to ensure compliance with the EU’s Regulation on interchange fees for card-based payment transactions. Generally, the regulation applies directly and does not require implementation by the member states, but it was left up to the member states to designate a national supervisory authority and establish sanctions. In Poland, compliance with the regulation will be overseen by the Financial Supervision Authority, which is also empowered to impose fines for violations.
It should also be pointed out that the amendment repeals national regulations setting maximum levels for interchange fees, as the rates specified in the EU regulation will apply instead. In practice, this means elimination of limits on fees for commercial cards.
The amendment also introduces a new type of regulated activity: operation of payment schemes. The operating rules are set forth in a new Chapter VIIb to the Payment Services Act. Oversight of operators of payment schemes will be exercised by the president of the National Bank of Poland, who will issue approvals for payment organisations to operate a scheme or to amend the rules for the scheme. The rules will have to comply with requirements set forth in the act. The new obligations will apply primarily to payment card organisations, but they could also impact the functioning of innovative payment solutions..
The rules for calculation of the fees to cover supervision costs which domestic (Polish) payment institutions are required to pay will also change. Until now, these fees have been set as a percentage of the total value of transactions executed by the institution. After entry into force of the amendment, these fees will be capped at 1% of the institutions’ so-called own funds, which should lead to a reduction in their amounts.
A change in the form of consenting to disclosure of information covered by professional secrecy under the Payment Services Act should also be mentioned. Currently consent can only be given in writing, but under the amendment it can also be given in electronic form.
Effective date and interim provisions
Most provisions of the act enter into force 60 days after publication, i.e. 8 February 2017. The exceptions include changes involving the rules for calculating supervision fees paid by Polish payment institutions, which do not enter into force until 1 January 2018.
Under the interim regulations, payment service providers will have to begin performing the obligations arising out of implementation of PAD no later than 18 months from the effective date of the act.
Operators of payment schemes as of the effective date of the act are given a 6-month grace period to apply for approval from the president of the National Bank of Poland. They will then be allowed to continue operating their scheme while their application is under consideration. If the decision is negative they will have 6 months from service of the decision to wind down their scheme.
Other major legal changes on the financial market
The amendment of the Payment Services Act is one of a number of new or planned regulations impacting the Polish payment services market, as well as the broader financial market. Among other proposals currently at various stages of the legislative process, the following are particularly notable:
- The draft Act on Mortgage Credit and Supervision of Mortgage Credit Intermediaries and Agents, which calls among other things for adoption of regulations governing credit intermediaries generally—and not, as the title of the bill suggests, only mortgage credit intermediaries
- The draft “anti-usury act” (bill to amend the Criminal Code and certain other acts), introducing extensive restrictions and sanctions related to fees charged by lenders.
Rafał Kuchta, New Technologies Practice, Wardyński & Partners