The Payment Services Directive 2, which entered into application on 13 January 2018, has direct consequences on the business model of marketplace and e-commerce platforms in Europe.
Most marketplaces today collect payments on behalf of their merchants before the settlement takes place and act as intermediary party handling funds from both a seller and a buyer. Under PSD1, marketplaces and e-commerce platforms were able to operate this way under the exemption attached to the “commercial agents” status. According to the recital 11 of the Directive, this exemption has been applied very differently across Member States, with applications going sometimes beyond the intended scope and risking distorting competition. It has therefore been removed in the PSD2.
The changes to the scope brought by PSD2 will likely affect almost all players on the market. To be exempted, a marketplace will now only be “authorized to negotiate or conclude the sale or purchase of goods or services on behalf of only the payer or only the payee.” (Recital 11 and Article 3.a. of PSD2), which is a remarkable change compared to the ground for exemption under PSD1. This means that marketplaces acting as intermediary will have to comply with PSD2.
In order to comply with the new rules introduced by PSD2, marketplaces can follow two paths:
- Apply for a payment institution license – which is a lengthy and costly process that does not guarantee the acquisition of a license
- Delegate the control of the funds and outsource payments processing to a payment service provider with a license – a choice that most marketplaces made in certain European countries already.
The Payment Services Directive 2 does allow for another exemption. It offers Member States the possibility to exempt businesses with an average monthly transaction volume under a certain threshold, as long as this threshold is under EUR 3 million. Marketplaces will therefore have to refer to the national legislation implementing the Directive. France and Germany have already chosen not to incorporate this exemption in their legislation, while a number of countries are still discussing the transposition of the Directive in national law.
Fore more information about the implications of PSD2, please contact email@example.com.