23 February 2004

ECB Comments on Commissions Framework for Payments

The Eurosystem supports the Commission’s view that national legal barriers should be removed. However, regulation should be restricted to fundamental issues and provide a common basic level of legislation for market participants.

As regards the proposed scope of payments under the new legal framework for payments, the Eurosystem agrees that it should apply in principle to all national and cross-border retail payments within the EU, except cheques. The overall goal must be one domestic payments market in the EU, and a fortiori in the euro area.

The concept of one “domestic payment market” would be enhanced if, as a rule, no new distinctions were made between national and cross-border. Hence as general policy guidance, no specific legislation on cross-border payments should be introduced

The Eurosystem considers that a legislative framework is needed to create a single domestic payment area in the EU. The legislation should establish clear and consistent definitions of key terms for payments.

Fundamental concepts, e.g. payment, payment service provider, etc. should be clearly and consistently defined in the New Legislative Framework for Payments (NLF). The aim of the legal framework should be to provide transparency and clear rules of responsibility .

For some areas, regulations would be the most appropriate and flexible instrument, as they are directly applicable in the Member States without any need for transposition. However, regulations should only be used “whenever possible”. In the case at hand, the appropriate legislative instrument for the NLF at Community level, if any, needs to be identified on a case-by-case basis.

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