News & Events

Card Charges – Payment Services Directive

Wed Feb 14 2018

On 12 January 2018 the second Payment Services Directive was transposed into Irish law by the European Union (Payment Services) Regulations 2018 (the “PSD2 Regulations”). This was just in time to meet the deadline of 13 January 2018 that was imposed by the Directive. With effect from 13 January 2018 the use of cards in card-based payment transactions between a payer (the consumer) and a payee (the broker) are subject to new rules as set in the regulations.  In a nutshell, brokers may no longer apply any charges or surcharges or charge any supplementary fees to their customers who wish to make premium or any other payments by credit or debit cards.

  1. The effect of Section 86(6) of the PSD2 Regulations is to prevent a payee (the broker) asking the payer (the consumer) to pay a charge or surcharge for the use of a credit card or any of the devices outlined in 2 below.
  2. With effect from 13 January 2018 there is a prohibition on surcharging customers who wish to make a payment to a broker involving:
    • a card,
    • a mobile phone,
    • a computer or other device containing the appropriate payment application (NB. the ban does not prohibit credit transfers or debit transfers)
  3. This ban on charges does not apply to transactions using “commercial cards”.
    • Commercial cards are defined as “any card-based payment instrument issued to undertakings or public sector entities or self-employed natural persons which is limited in use for business expenses where the payments made with such cards are charged directly to the account of the undertaking or public sector entity or self-employed natural person.”

NB: BROKERS GENERALLY SPEAKING WILL BE UNABLE TO VERIFY WHETHER OR NOT A CARD IS LIMITED TO BUSINESS EXPENSES OR EVEN TO WHAT ACCOUNT A CARD IS CONNECTED. IT WILL THEREFORE BE VERY UNSAFE TO SEEK TO AVAIL OF THE EXCEPTION IN POINT 3 ABOVE

If you have any further queries please contact compliance@brokersireland.ie

Susan Naughton – Head of Compliance (General)