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Last month, the Dutch Minister of Finance did sent the PSD2 evaluation (Dutch only) to the parliament.

On several mentioned attention points, problems are not correct identified. Lack of API standardization, free access to payment data and a ban on surcharching are seen as attention points. But the real reason is not recommended. Why do we continue to find it normal that the Dutch consumer pay too little for payment services?

Too cheap payment services

(Almost) All Dutch consumers believe that payment transactions should be free. After all, it is “their money”. Also, politicians and consumer organizations support this idea. Payment services can be compared to internet or telephony. Consumers simply pay for internet and telephony a fair price. Politicians and consumer organizations find this quite normal too. Why is this so different for payment services?

The financial sector tries to satisfy the desire for free payment services for years. The costs of the payment are not charged directly to the private customer. Costs mainly shifted towards business customer. Of course, the financial sector could and should have resisted more. Due to PSD 2, the skewed proportions only get more squeezed.

Lack of API standards

It was only logic that banks developed the mandatory API’s as cheaply as possible. An own standard does not require consultation and is easier to integrate into the own systems. In addition, lack of uniformity keeps competition away. At the time, the Dutch ministry and Dutch central bank were too easily convinced to act different. The UK they did not make this mistake, authorities immediately enforced a national API standard, long before Brexit.

Free access to payment information

Free access is not necessary, we should not even want to. Banks however should charge their own customer, not third parties. In Europe, we stopped most interchange, interchange with cards are caped. Banks must (dare and be able to) charge the costs to their own customers. As a result, other parties will invest in product development, which may or may not be successful in the market.

Ban on ‘surcharging’

Surcharging is currently not allowed now and, in the future not a necessity. However, the consumer should pay their fair share. Then merchants no longer must pay for all the costs. In that situation merchants will face hardly cost differences between payment products. Moreover, surcharging is already difficult. For example, when the consumer use ApplePay or GooglePay. Merchants notice with ApplePay or Googlepay the actual costs when the card acquirer’s presents their bill. Then it becomes clear whether the customer has paid with a debit, credit or company card. Anyhow are these payment options not cost transparent and not only for merchants, see also my earlier blog.

Still hope

It is good to see that the Dutch minister wants to give the European Supervisory Authorities a greater role. And this while the evaluation report seems to argue for more national supervision, to confirm that we are indeed a “Dutch uncle”. It is good that the minister knows that this is not the case.

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