Document on transposition of Payment Services Directive

The Central Bank has published a consultative document to inform the public about Malta's transposition of Directive (EC) 2007/64, known as the Payment Services Directive (PSD) and to guide the bank's future initiatives in relation to payment services.

Developments in the bank's retail payment services policy, coupled with transposition of the PSD and implementation of the Single Euro Payments Area (Sepa), will considerably change the payment services market landscape in Malta and will affect the business processes of all enterprises which process their own payments or the payments of others, the Central Bank said.

The Central Bank explained that while the euro area is already a single currency area in respect of cash, work is now under way to transform it into a single area also for payment services - in particular card payments, credit transfers and direct debits. This is essential as most payments in Europe are electronic.

It added that the aim of the PSD is to ensure that payments within the EU become as easy, efficient and secure as domestic payments within a member state by providing the legal foundation to make the Sepa possible.

Sepa is a Europe-wide project driven by banks and supported by the European Commission and the European Central Bank, intended to turn payments within the euro area into domestic payments by 2010.

This will mean that payments (including ATM withdrawals) between Malta and other euro area countries will be as easy, subjected to the same charges, and carried out under the same conditions, as payments within the Maltese islands.

In its role as regulator of payment systems, including retail and wholesale payment systems and instruments, the Central Bank said it wished to ensure that the implementation of the PSD, which allows the national legislator substantial discretion, is carried out in a way that is of most benefit to businesses and consumers on the island.

While cash payments and cheques do not fall within the scope of the PSD, the Central Bank said it would like to view retail payment services as a whole in order to continue to formulate holistic and consistent policy. The Central Bank is accepting comments from the public also in this regard.

The consultative document is available on the Central Bank's website.

Replies are to be submitted as indicated in the document before March 31, 2008.