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An “unprecedented” wave of industry feedback has persuaded the EU’s top financial watchdog to scrap plans to put a maximum €10 threshold on remote payments.
The European Banking Authority on Thursday unveiled its final suite of rules about customer authentication as part of new EU rules called Payment Services Directive 2, which took effect last year and which all EU member states must implement by January 2018.
The watchdog scrapped its initial proposal for a €10 maximum on contactless payments where customers do not have to enter a PIN, raising the threshold to €30. The EBA also said exemptions for authentication would be allowed in instances where long queues while customers enter their PINs could cause problems, such as transport payments.
The rules are “the result of difficult trade-offs between the various, at times competing, objectives of the PSD2, such as enhancing security, facilitating customer convenience, ensuring technology and business-model neutrality, contributing to the integration of the European payment markets, protecting consumers, facilitating innovation, and enhancing competition through new payment initiation and account information services,” the EBA said.
PSD2 is intended to boost competition in the name of ‘open banking’ by forcing banks to allow third parties, such as innovative financial technology companies, to access the data of customers who authorise it.
But fintech companies complained that the big banks had too much sway over how the rules were being written, particularly around data-protection rules. Fintechs have griped, for instance, that banks deliberately slow their responses to access requests or find other ways to interfere with the performance of fintech apps; something the banks deny.
On Thursday the EBA said that banks that use a dedicated interface for payments between merchants — like Amazon, for example — and between providers that can consolidate customer account information must use an interface that has the same level of availability and performance as that offered to their banking customers. They will also have to tell merchants immediately on whether or not the customer has enough funds available to make a payment.