Key Legislative Initiatives on the Establishment of an Internal Market for Payments

It was the banking sector that first developed self-regulations on the execution of electronic payments (Payments) and the conditions under which Non-Banks could participate in the ecosystem of Payments in the European Union. The absence of a clear and harmonised legislative framework for the European Payments market often resulted in Non-Banks encountering disproportionate requirements when trying to offer their Payment related services as a banking competitor. With the 2020 Financial Services Action Plan, the ambitious target was set by the European legislature to create an internal market for Payments. The first European legislative initiatives only covered the requirements applicable to the processing of cross-border Payments. With the adoption of EMD in 2000 and PSD in 2007, the European legislature first introduced legal requirements for ensuring sound competition between banks and Non-Banks from a financial services regulatory perspective. As such, these directives are considered to have marked the beginning of the transition towards a level playing field between banks and Non-Banks. This chapter describes the main initiatives that have been developed by the European legislature to create an internal market for Payments.