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EU financial associations want traditional payments excluded from eIDAS regulation

EU financial associations want traditional payments excluded from eIDAS regulation

Financial institutions and digital commerce entities in Europe are calling for clarification on some wordings used in the EU’s Digital Identity Regulation (eIDAS) which seem to make the application of the regulation mandatory for the full lifecycle of payments.

The call is contained in a recent statement with six signatories, namely the European Association of Co-operative Banks (EACB), the European Association of Payment Service Providers for Merchants (EPSM), the European Banking Federation (EBF), EuroCommerce, the European Savings and Retail Banking Group (ESBG), and Independent Retail Europe.

The signatories say they welcome the ambitions presented in the eIDAS and the European Digital Identity Wallet (EUDIW) which they believe will foster quicker onboarding processes and a better user experience.

“However, we caution that Recital 31 and Art. 12b.2 as adopted by the European Parliament and corresponding Art. 6db.2 of the Council’s General Approach are currently open to interpretation. The current wording seems to imply that the full payment sphere is included in eIDAS 2.0 on a mandatory basis,” they state.

To them, including widely used cards and payment processes in the new EUDIW Infrastructure on a mandatory basis will mean huge unplanned investments not only in the financial sector and nearly all merchants in Europe, but also for global acceptance networks.

“This could possibly result in disproportionate costs for merchants and the payment ecosystem that accept card and account-to-account payments in accordance with the second Payment Services Directive (PSD2) and its successors,” the signatories to the statement argue.

The groups also point out that the regulation, as it is now, increases the liability exposure for banks and merchants.

“The proposal in its current form does not sufficiently address the question of liability, which impedes applying its provisions to payments. This is why the associations call upon the legislators to keep payment requirements non-mandatory in the Digital Identity Regulation.”

They believe it’s important for the European Parliament and the European Council to pay attention to this concern in the last part of their “trilogue negotiations.”

“The associations call upon the co-legislators to adjust the wording of the legal text in such a way that the mandatory acceptance of the full lifecycle of payments is kept outside the scope of the Digital Identity Regulation.”

Last month, Firefox browser maker Mozilla also raised concerns that proposed adjustments to Articles 45.2 of the eIDAS legislation could render the web less safe and secure by making state surveillance more probable.

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