Belgium - all brick-and-mortar businesses will have to offer at least one means of electronic payment to consumers

New requirement

A draft law dated 3 February 2022 will introduce this new obligation into the Code of Economic Law (CEL). Notably, there will be a new Chapter 2/1 (entitled “Payment to consumer”) inserted in Title 2 of Book VI, which will keep existing requirements in terms of rounding cash payments (i.e. Articles VI.7/1 – VI.7/3; we briefly discuss these below) and add the new one under Article VI.7/4.

New Article VI.7/4 CEL will read: “Without prejudice to Article VII.30, §3 [i.e. legal provision that prohibits surcharging in Belgium], when a payment in euro is made with the simultaneous physical presence of the consumer and the undertaking, the undertaking shall make available to the consumer a means of electronic payment”.

The article further specifies what constitutes a “means of electronic payment”, that is, any means “other than coins and banknotes denominated in euro, provided by a payment service provider…”.

We address below some of the key features of this new obligation.

Undertakings subject to the obligation

The legal obligation applies to anyone falling under the general definition of “undertaking” set out in Article I.8, 39° CEL that reads “any natural person or legal entity carrying on an economic goal in the long run, including its associations”.

The definition is broad, and may include a great variety of businesses, e.g. retailers, lawyers, dentists, or any association or (public) administration carrying on an economic activity. For example, a municipality will have to accept a means of electronic payment in relation to its economic activities (e.g. the management of a swimming pool or a public library, or when renting premises to consumers).

Business to Consumer (B2C) only

Undertakings are required to offer a means of electronic payment to consumers only, and this does not apply to situations where an undertaking would have to deal with other businesses only (Business to business, or B2B).

Means of electronic payment

As mentioned above, the definition is also very broad (i.e. anything other than coins and banknotes) and also technologically neutral (so as to keep up with technology and market developments in the fields of payments). The definition leaves open the possibility for undertakings to choose the electronic payment solution that would be the most suitable and appropriate for their business (in terms of costs, type of customers, volume of payments, etc.). Therefore, the new obligation does not mean all undertakings in Belgium will have to buy or rent a payment terminal in order to accept card-based payments (e.g. Bancontact and/or Maestro and/or Mastercard and/or Visa). Other options include for example accepting a credit transfer from the payers (perhaps from their mobile bank app, or smartphone, while they are in the shop) or scanning a QR code in order to pay via Payconiq (and (undoubtedly other solutions will be available in a near future).

The freedom of choice for undertakings is key here, as one could legitimately wonder whether this new requirement would not go against the so-called “freedom to conduct business” (enshrined in Article 16 of the EU Charter of Fundamental Rights)? This topic was briefly addressed by the “Conseil Supérieur des Indépendants et des PME” (the ‘CSIPME’) in its recommendations to the relevant ministers.

However, there is no obligation to accept limited payment instruments (e.g. meal vouchers, eco-cheques, or consumer voucher), or cryptocurrencies and other virtual currencies. The acceptance of those instruments as a means of payment by Belgian undertakings remains optional.

Sanctions

Those undertaking that would not comply with the new obligation could be subject to a level-2 sanction, which is a criminal fine in an amount between EUR 26 and 10,000. The criminal nature of the sanction means that the amount will have to be multiplied by the multiplication factor, which is currently at 8 – meaning that currently the fines are EUR 208 to 80,000.

Payments in cash still allowed

Cash payments are still possible, and undertakings cannot refuse such payments unless there is a good reason for it (e.g. under anti-money laundering laws) or if the cash payments exceeds EUR 3,000. This is in line with the views shared by the European Commission (EC) in its Retail Payment Strategy (see our previous alert here), in which the EC said it would continue supporting the acceptance of cash payments as they largely remain in use in the EU.

It may be useful to recall here that undertakings that accept cash payments must round up or down the amount that is owed to them. This requirement was introduced in 2014, and is that “cash payments must be rounded to the nearest multiple of 5 cents”. For example, a bill in the amount of EUR 12.91 will be rounded down to EUR 12.90. But a bill of EUR 12.98 will be rounded up to EUR 13.00. For the avoidance of doubt, it is indeed the total amount that the consumer must pay at the checkout that must be rounded (rather than each item/price separately). It does not mean that 1 eurocent and 2 eurocent coins are no longer a valid means of payment – they can still be used.

Prohibition of surcharging

Surcharging (i.e. charging the customer an additional fee for using a given payment instrument) is a way of steering customers towards certain payment instruments. This practice is regulated under PSD2:

• Payment service providers cannot prevent the payee from requesting from the payer a charge for the use of a given payment instrument (Art. 62(3) PSD2). However, any charges that would be applied could not exceed the direct costs borne by the payee for the use of the specific payment instrument. Therefore, the principle is that surcharging is allowed (at least, at the EU level).
• However, there is an exception for certain payment instruments (Art. 62(4) PSD2): payees cannot apply a surcharge for the use of a payment instrument in relation to which interchange fees are regulated under the Interchange Fee Regulation (IFR)(in practice, this means consumer cards – as opposed to commercial cards), or the SEPA regulation (for credit transfers and direct debits).
• Additionally, PSD2 left the option for each EU Member State to prohibit or limit the right of the payee to request charges, taking into account the need to encourage competition and promote the use of efficient payment instruments (Art. 62(5) PSD2). Belgium has activated that option and completely banned surcharging, including for example in relation to commercial cards (despite the fact that the IFR does not impose interchange fee caps on commercial cards). Therefore, surcharging is prohibited in Belgium for any kind of payment instrument (from this perspective, all instruments are put on equal footing), and this means that Belgian undertakings will not be able to apply a surcharge on the consumer that would want to pay by using a means of electronic payment (instead of cash).

What about other steering practices?

There are other ways than surcharging for an undertaking to try and steer the consumer towards a particular means of payment. PSD2 (for all means of payments) and the IFR (specifically for card-based payments) allow the payee to steer the payer towards the payee’s preferred means of payment (e.g. because it is cheaper for the payee). For example:

- Merchants can simply inform consumers of the acceptance fees that they have to pay in relation to a particular means of payment and ask them to pay in a different way (e.g. “please pay with a Bancontact card, rather than a Visa or Mastercard card?”).

- Or they can offer a discount for using another means of payment (e.g. a discount for cash payment). Of course, there is always a risk that offering a discount for one means of payment could be interpreted as being an (illegal) surcharge of another means of payment – but in a “brick-and-mortar” context where the price is normally displayed clearly, there should not be too much risk of requalification of a discount of one means of payment into being a surcharge of another means of payment.

- Probably, the most common practice consists in setting a minimum transaction amount for the acceptance of a particular means of payment, e.g. for card payments. For card payments, this is expressly allowed by the IFR (Article 11(1) IFR). But of course, under the new Article VI.7/4 CEL, the undertaking will need to accept at least one means of electronic payment without any minimum amount, as otherwise it would be acting in breach of the new requirement.

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