ECJ provides definition of "payment account"
On 4 October 2018, the European Court of Justice (ECJ) issued a very relevant decision for the payment industry. It provided a definition for the term "payment account". The ECJ decided under which circumstances an online savings account may not be regarded as a payment account and consequently, when PSD1 does not apply. We believe the judgement should be valid under PSD2, too.
Here is a summary of the decision. The full text may be found here (C-191/17).
Summary
The ECJ decided that a savings account which allows for sums deposited without notice and from which payment and withdrawal transactions may be made solely by means of a current account may not be regarded as a 'payment account’.
The possibility of making payment transactions to a third party from an account or benefiting from such transactions carried out by a third party is a defining feature of the concept of ‘payment account’. Accordingly, an online savings account that lacks such features is not regarded as a payment account.
Background
ING-DiBa Direktbank Austria offers online savings accounts from which its customers can make payments and withdrawals by way of telebanking. Those transfers must always be made through reference accounts opened on behalf of those clients. Those reference accounts are current accounts which those clients may also hold in a bank other than ING-DiBa Direktbank Austria. Transfers made from or to online savings accounts do not involve the use of a payment service provider. Those online savings accounts require no notice, which means that customers may use the sums paid into those accounts at any time without negative repercussions on the interest generated.
The dispute at issue in the main proceedings concerns the clauses contained in the standard terms and conditions of the contracts used by the bank. According to the Federal Chamber for Workers and Employees, some of those clauses are contrary to the Austrian Payment Services Act, which constitutes the transposition of PSD1 into national law, and therefore are unlawful.
In order to rule on the lawfulness of those clauses, the Austrian Supreme Court took the view that it must first address the issue of the applicability of the Payment Services Act. In that context, the referring court must determine whether such online savings accounts must be categorised as ‘payment accounts’, within the meaning of PSD1, and therefore fall within its scope.
ECJ's definition of a payment account
The ECJ states that the wording of Art 4 No 14 PSD1 does not in itself make it possible to determine whether or not the notion of ‘payment account’ includes accounts such as those at issue in the main proceedings, for which an intermediate step, involving the transfer of funds between the savings account and the user’s current account, is necessary in order to carry out a payment transaction.
Accordingly, it is important for the ECB to take into account, in particular, the Payment Accounts Directive (PAD). Recital 12 of the PAD states, inter alia, that savings accounts are excluded from its scope as they do not constitute payment accounts, unless they can be used for day-to-day payment transactions. Accordingly, while savings accounts do not, in principle, fall within the definition of the concept of ‘payment account’, such an exclusion is not absolute.
Based on recital 12, and not surprisingly, the ECJ deems it not sufficient to name an account as ‘savings account’ in order to exclude its categorisation as a ‘payment account’. The determining criterion for the purposes of that categorisation lies in the ability to perform daily payment transactions from such an account. The ECJ then refers to Article 1(6) PAD, which provides that it applies to payment accounts through which consumers are able at least to place funds in a payment account, withdraw cash from a payment account, and execute and receive payment transactions, including credit transfers, to and from a third party.
As a result, the possibility of making payment transactions to a third party from an account or of benefiting from such transactions carried out by a third party is a defining feature of the concept of ‘payment account’. An account from which such payment transactions cannot be made directly, but for which use of an intermediary account is necessary, cannot therefore be regarded as being a ‘payment account’ within the meaning of the PAD and, consequently, within the meaning of the PSD1.
Conclusion
A savings account which allows for sums deposited without notice and from which payment and withdrawal transactions may be made solely by means of a current account does not come within the concept of ‘payment account’.
