You might have noticed that your bank changed it’s terms and conditions for operating accounts over the weekend of 1st Nov 2009 in order to comply with new legislation. Most banks have done this in such a way as to avoid attention drawn to it, but the new legislation for current accounts, clearing, credit and debit cards, ATMs and all other payment types (except cheques) is very significant. Until now there has been no legislation in Ireland for any payment system introduced in the past 100 years. Only the cheque had specific legislation.
The European Communities (Payment Services) Regulations 2009 (PSR) came into force on Nov 1st 2009 as the transposition of the Payment Services Directive. You can download it here. Similar legislation will be in place in 32 European countries shortly (EU countries plus Switzerland, Iceland, Liechtenstein, Norway, Monaco.
Among the provisions are:-
Examples of the effects of the legislation will be:-
The European Communities (Payment Services) Regulations 2009 (PSR) came into force on Nov 1st 2009 as the transposition of the Payment Services Directive. You can download it here. Similar legislation will be in place in 32 European countries shortly (EU countries plus Switzerland, Iceland, Liechtenstein, Norway, Monaco.
Among the provisions are:-
- Much greater transparency of information when opening accounts and when undertaking transactions
- Clarification of rights and obligations of service users
- Rules for the conduct of business, including rules for clearing of transactions
- Rules for the establishment of new types of institutions (called “payment institutions”) which may provide payment services.
Examples of the effects of the legislation will be:-
- Payers will have a right to demand a refund of a direct debit for 8 weeks after the payment date without specifying a reason. In practice, this means that in the event of a dispute, you may have an opportunity to get your money back from the bank, and then argue with the payee from a position of greater strength.
- Payment by numbers – until now there was some legal uncertainty about account numbers, particularly if you put a wrong account number on a credit transfer. Now there is certainty – if the bank credits the account number provided by you, then the bank has fully discharged it’s responsibility. The message – be careful with account numbers.
- A number of initiatives are under way to establish payment institutions in Ireland. These will offer competitive and/or novel forms of payment services. Establishment of a payment institution is much easier than establishing a new bank.