New Danish Payment Services and Electronic Money Act

Next year, the payment services sector and the businesses providing payment services will be subject to a number of amended rules for payments and other financial services. The Danish FSA has just concluded the hearing of the payment services and electronic money bill which is to implement the second payment services directive and replace the Danish Payment Services and Electronic Money Act in 2018. Plesner has studied the most important amendments to the future rules.

In the newsletter from Plesner's Banking and Finance team you can read more about:

Amendments to the rules for restricted authorisations
The Payment Services and Electronic Money Act abolishes the requirement that providers of payment instruments with limited application ("limited networks") must have an authorisation. However, providers will still be subject to a significant part of the Payment Services and Electronic Money Act as the Act's rules protecting consumers will still apply. Providers of such payment instruments will also have to report to the FSA if the total value of the payment transactions made in the preceding 12 months exceeds EUR 1 million.

The payment institutions' access to bank accounts

As something new, the Payment Services and Electronic Money Act introduces an obligation on banks to make it possible for payment institutions to open bank accounts with them on objective, non-discriminating and proportionate terms and conditions. It means that the Act addresses the problems that providers (particularly money transfer companies and unregulated payment initiation services) have had getting access to payment accounts and consequently be able to do business. However, the new rule brings some uncertainty as to which account types that a payment institute is entitled to open with a bank.

Liability when opting out of strong customer authentication

In general, the Payment Services and Electronic Money Act will introduce requirements to use strong customer authentication in connection with payments. One of the results of the liability rule of the Payment Services and Electronic Money Act will be that the party to the payment process that does not require/accept strong customer authentication will be liable for any loss, also if the payer's provider does not for instance demand strong customer authentication because the transaction in question is subject to an exemption from the requirement of strong customer authentication. This liability rule seems in several respects to be either potentially in conflict with or could be in conflict with EU law.

Click here to read the entire newsletter about the new Danish Payment Services and Electronic Money Act (in Danish).

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