Payment service providers
New legislation is due to enter into force on 2 March 2009 affecting payment services provided to businesses and consumers. This includes payments by debit and credit cards, direct debit, credit transfers, standing orders and other digital payments. The legislation follows an EU Payment Service Directive (PSD) which was designed to define the information that consumers and business must receive when making payments.
The rules pave the way for UK-based, non-bank businesses to enter and compete in the EU payments market on the basis of a licence obtained from the Financial Services Authority in the UK.
By 2012 all UK and EU electronic payments in Sterling or Euro must be made by the next business day following that when the transaction was made.
The Financial Services Secretary to the Treasury said in a statement that “This legislation will drive competition in the market for payment services, leading to greater efficiency, transparency and more innovation, bringing further benefits and certainty to UK consumers and businesses making everyday payments. It will also enhance consumer protection, with the new rules for payment service providers."