Revised EU Cross-Border Payment Regulation – Delayed enforcement of its provisions on currency conversion

In that statement, the EC refers in particular to the CBPR2 provisions on currency conversion that will become applicable on 19 April 2020. The EC indicates that:

• although "… Payment service providers and parties providing currency conversion at point of sale or ATMs have had sufficient time to adjust their IT infrastructures and customer-facing interfaces to comply with the requirements …
  
  
• The Commission services appreciate that applying these requirements in the current context may pose some challenges, given the extraordinary circumstances linked to the COVID-19 crisis. The Commission services could therefore understand that, without prejudice to the payers’ rights, the National Competent Authorities may consider the necessity to enforce the new rules in a flexible manner, taking a reasonable approach towards PSP’s ability to implement the new rules while at the same time preserving the stability and continuity of online banking interfaces under the present circumstances".

The CBPR2 was officially published in the Official Journal of the EU (OJEU) more than a year ago (on 29 March 2019), and has required the industry to make quite a few changes to both their contractual terms as well as IT systems in order to ensure compliance within the required deadlines (namely 19 December 2019 for the requirements on equality of charges; and 19 April 2020 and 19 April 2021 for the requirement related to currency conversion). Therefore, a number of payment service providers (PSPs) including card issuers and acquirers, as well as providers of dynamic currency conversion services (DCC providers), will be ready to comply with the new set of requirements without a need for flexibility in the enforcement.

However, we would also expect that the flexible enforcement supported by the EC will be welcomed by a number of other PSPs and DCC providers. Although it remains to be seen how different national regulators will understand the concept of flexible enforcement, it is likely that this concept will not be interpreted in the same way by all regulators across the EEA. PSPs and DCC providers would therefore be well advised to approach their national regulator to discuss how they intend to enforce the CRPR2 after 19 April 2020.

Refresher: what is the CBPR2 about?

In case you would like to refresh your memory on what the CBPR2 requirements are (both in relation to the equality of charges, as well as currency conversion), please refer to our previous client alert published here.

Should you have any questions about the above, please do not hesitate to contact one of the members of the Bird & Bird global payments team.

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If you would like to read Bird & Bird's previous alerts, please check out our Payments In Focus web page here.