PSD2 update | Liability under Article 90
Published on 6th Jun 2018
In case you missed it, a corrigendum to PSD2 was published in the Official Journal on 23 April 2018. You'd be forgiven for dismissing it – consistent with its name, it makes a series of corrections, including to certain cross-references. However, it does contain one substantive point, relating to Article 90, which deals with the liability of a PSP in the case of a non-executed, defective or late payment transaction initiated by a PIS
The corporate opt-out (COO) for Title IV has been extended to include Article 90. Overall, this would be good news, and we believe the authorities are considering how best to transpose this into English law, effectively by amending the Payment Services Regulations 2017. However, it raises the practical question of how a PSP would update its COO.
Following FCA guidance, the COO invariably sets out the specific regulations which the PSP and user are agreeing should not apply; this list would need to be updated when regulation 63(5)(a) is updated to refer to regulation 93 (the UK provision corresponding to Article 90 of PSD2). This can be readily done for new contracts. For existing contracts, however, whether a one-way notification can be given will need to be assessed in the light of the contract's variation provisions.
In addition to this, other corrections relating to Article 90 will also likely require attention:
- First, given the amendment to Article 52(5)(f), the pre-contractual information will need to be updated. It will need to provide information to payment service users (if not already included) on the liability of the PSP for non-execution, defective or late execution where the PSU has used a payment initiation service provider to initiate the payment transaction (i.e. Article 90, PSD2 liability).
- Second, as Article 90 has now been included within the scope of Article 92, a PSP which suffers loss due to liability to a payer for non-execution, defective or late execution of payment transactions can now recover that loss from a PISP if the liability was attributable to that PISP.