[Dave Birch] You may not have noticed, but the European Parliament finally adopted the Payment Services Directive (PSD). The The text of the PSD will now be forwarded to the EU Council for final adoption. The Member States should then transpose the Directive as early as possible, and by 1 November 2009 at the latest, into national law. So if all goes well, in a couple of years time, I’ll be able to use my debit card in Ireland (as I did last week) and my credit card in The Netherlands (as I did a couple of weeks ago). Hhhmmm. Oh well, at least I’ll now be able to give my bank account details to companies in Romania so that they can direct debit my current account…

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While SEPA is the cause of considerable activity in the business world — such as the announcement by UK payment services companies Voca and LINK Interchange Network that they will merge to form an company that will handle 8 billion payment transactions per annum — I wonder what it will mean to the average consumer. A very small proportion of European retail payments are cross border, so for the typical European consumer, it will have no impact whatsoever For the typical merchant, it may well mean higher costs. For the typical bank, it definitely means higher costs. The European Savings Banks Group (ESBG) – an international banking association representing about one third of the retail banking market in Europe – has welcomed the PSD, but warns that delays in approving the text could yet undermine the legitimacy of the new SEPA-inspired payment instruments. In a slightly predictable move, the group says that

the PSD might weaken public confidence in electronic payments by opening the doors to a new category of non-bank ‘payment institutions’

I do agree with them about one thing though: while the PSD increases costs for providers of electronic payment services it doesn’t do anything about cash, which is

the most expensive means of payment for society as a whole.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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