PAYMENT OF SERVICES IN THE INTERNAL MARKET
(15625/05, 8758/06)
Letter from Ed Balls MP, Economic Secretary,
HM Treasury to the Chairman
I refer to your letter of 25 January 2006[37]
that requested updates on the results of the Government's consultation
process for the Payment Services Directive (PSD) and other significant
developments. HM Treasury published a consultation document on
the PSD on 3 July 2006. Please find enclosed, for your Committee's
information, HM Treasury's Summary of Responses to our consultation
document and a revised Regulatory Impact Assessment (RIA) for
the PSD (not printed). I have also set out below my assessment
of the extent to which the draft Directive meets the criteria
and concerns to which the Commons European Scrutiny Committee
has drawn attention in previous reports.
The PSD is currently under negotiation in the
Council of Ministers and in the European Parliament, and is likely
to be discussed at the upcoming meeting of the Economic and Finance
Ministers' Council (ECOFIN) on 28 November 2006.
The Better Regulation Unit at Cabinet Office
is content that these documents do not require further clearance
from the Panel for Regulatory Accountability (PRA). I have therefore,
through a separate letter to the Chair of the Commons European
Scrutiny Committee, copied the documents to PRA members for information.
The Commons European Scrutiny Committee asked
for my assessment of the extent to which the draft Directive met
the criteria set out by Government in:
— improving transparency;
— increasing competition;
— ensuring proportionality;
— promoting technical neutrality; and
— allowing the payments industry to
operate in an environment that encourages growth and innovation.
My assessment of the European Commission's original
draft proposal for a Payment Services Directive is broadly positive.
The licensing regime that the Commission has proposed for Payment
Institutions is largely proportionate, and closer to the UK's
current, less stringent regime than that of many Member States.
I believe this to be proportionate to the risks involved in the
provision of payment services. Also, during work on previous drafts
of the proposal, the UK successfully pressed for the introduction
of a waiver regime for smaller firms. As I previously indicated
to the PRA, I continue to see the key challenge in negotiations
on this Directive as supporting this proportionate approach, whilst
securing improvements throughout the Directive to ensure that
it remains beneficial to payment service providers and users in
the UK.
— To improve transparency, the
draft Directive contains provisions to ensure payment service
users have relevant and sufficient information when using payment
services. HM Treasury supports this objective, and will work to
secure improvements in the Directive to prevent information overload
in favour of a balanced approach to ensure users are informed
to exercise choice in the payments market.
— To ensure proportionality and
improve competition, the draft Directive introduces a licensing
regime for a new category of payment service providers—called
Payment Institutions—alongside credit institutions and E-money
issuers which currently provide payment services. It also contains
a provision that opens up access to payment systems to non-bank
payment service providers, which should have a significantly positive
impact on competition. HM Treasury supports this move to bring
non-bank participants into the payments market, and will push
for the new licensing regime to remain proportionate to the risks
involved in providing payment services. In addition, we will also
continue to press for an appropriate waiver for smaller Payment
Institutions, such as money remitters, to ensure they can continue
to operate without being subject to additional regulatory requirements.
— To promote technical neutrality,
the draft Directive does not contain provisions discriminating
between payment service providers using different types of payments
technology. HM Treasury will continue work to ensure that the
provisions within the Directive are workable for a wide variety
of business models.
— To encourage growth and innovation,
the draft Directive harmonises the legal and technical provisions
necessary to underpin a single market in payment services, which
the European Commission estimates will bring significant efficiency
savings. If adopted, the Directive will also facilitate the payments
industry's work to create a Single Euro Payments Area (SEPA),
which aims to develop new products and services to allow cross-border
Euro payments to be made as easily, cheaply and quickly as in
individual Member States. HM Treasury supports this objective,
and will work to ensure the Directive's provisions remain workable
for different business models, including models using innovative
payments technologies.
I have enclosed the Summary of Responses to
the consultation document and the revised Regulatory Impact Assessment(not
printed) which have been finalised in consultation with the Better
Regulation Executive at the Cabinet Office. I believe that both
these documents provide a detailed and thorough assessment of
the negotiating options available to the UK. The documents conclude
that the benefits of the European Commission's draft Directive
will outweigh the costs identified if the UK proceeds to support
its general thrust whilst constructively seeking changes where
necessary, taking into account the responses received during our
consultation process.
15 November 2007
Letter from the Chairman to Ed Balls MP
Thank you for your letter of 15 November 2006,
Sub-Committee B considered your letter at its meeting on 27 November.
We were grateful to you for providing us with
both the revised RIA and the summary of responses from the Treasury's
consultation on the draft Directive. We are also reassured that
the Directive as it stands conforms to the Government's criteria
on transparency, proportionality, competitiveness, technical neutrality,
and growth and innovation.
We are content to lift scrutiny ahead of the
meeting of the Economic and Finance Ministers' Council on 28 November.
29 November 2006
37 Correspondence with Ministers, 40th Report of Session
2006-07, HL Paper 187, p 121. Back
|
