Definition of Data

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Main Focus of Document

Establishes the rules to protect persons that are users of payment instruments and facilities employing electronic devices or facilities

Target Beneficiaries or Sector

citizens, government

Key Elements

The Directive applies to single electronic fund transfers, as well as to framework contracts and transfers covered by them. Electronic fund transfers include those carried out through, or by means of, or a combination of the following:
(a) Point-of-sale (POS) terminals;
(b) Automated teller machines (ATM);
(c) TV, internet and other communication channels;
(d) Telephonic instruments, including mobile phones;
(e) Cards; and
(f) Card-based and network-based stored value products/devices (e-money).

3. Duties of Payment Service Providers
(1) Payment service providers offering electronic funds transfers by any means are responsible to ensure compliance to this Directive for their own acts and for the acts of any third party contracted by them to provide services linked to the execution of electronic fund transfers or the provision of connected services to the customers.
(2) In particular, payment service providers may use the services of agents and shall adhere to all applicable laws and directives on appointing and obtaining the services of such agents.
(3) Payment service providers shall have a proper system for registration of customers before providing electronic fund transfers and shall not impose the use of individual channels or products unless the customer has subscribed to it.

5. Interoperability
When a payment service provider offers electronic fund transfer services that rely on general purpose electronic devices, software or service not provided by the payment service provider to the subscriber, they shall ensure that any customers be in a position to request for and avail such services, irrespective of their choice of the provider providing the electronic device, software or service.

6. Customer Protection
(1) Payment service providers shall provide the terms and conditions applicable for the utilisation of electronic fund transfer services in an appropriate manner in websites, brochures and registration forms. These terms and conditions should be unambiguous and shall consist of, inter alia:
(a) Authorised types of payments;
(b) Rights and responsibilities of the service provider, account holders and agents with regard to electronic fund transfer services (or the specific category offered);
(c) All applicable fees and charges;
(d) Benefits, incentives and rewards;
(e) Provisions for dispute resolution;
(f) Procedure for reporting lost or stolen payment instrument or device;
(g) Procedure for stop payments; and
(h) Customer service contact numbers.

PROCESSING OF ELECTRONIC FUND TRANSFERS
7. Execution
(1) A payment service provider shall execute a payment order originated by a payer immediately upon receipt unless otherwise instructed by the sender. However, in no event shall the payment service provider be obligated to execute the payment order if there are insufficient funds in the account from which the funds are to be transmitted.
(2) The payee’s institution shall ensure that the amount of the payment transaction is at the payee’s disposal immediately after that amount is credited to the payee’s institution’s account.
(3) In the evaluation of the immediacy of execution, rules of electronic fund transfer systems through which the order is processed shall be taken into account. Fund transfers originated by the payer shall in any case be finally made at the disposal of the payee within 24 hours from initiation of the transfer.

10. Transmission of payment orders through electronic fund transfers or other communication systems
(1) If a payment order addressed to a payment service provider is transmitted to an electronic fund transfers system or other third-party communication system for transmittal to the institution, the system is deemed to be an agent of the sender for the purpose of transmitting the payment order to the institution. If there is a discrepancy between the terms of the payment order transmitted to the system and the terms of the payment order transmitted by the system to the institution, the terms of the payment order of the sender are those transmitted by the system, unless otherwise provided by the rules of the system.
(2) A bank or other payment service provider shall not avoid any obligation to its customer by reason only of the fact that it is a party to a shared electronic fund transfers system, and that another party to the system had failed to fulfill its obligations under this Directive.
(3) The respective rights and responsibilities of parties to a shared electronic fund transfers system shall be determined by bilateral or multilateral agreement of parties.

UNAUTHORISED AND ERRONEOUS FUND TRANSFERS
11. Authorization of Transfers
(1) An electronic fund transfer is considered to be authorized only if the sender has given consent to execute such transfer.
(2) Consent to execute an electronic fund transfer or a series of transfers shall be given in the form agreed between the parties.
(3) In the absence of such consent, a transfer shall be considered to be unauthorized.
(4) If a bank or other payment service provider and its customer have agreed that the authenticity of payment orders issued to the bank or the payment service provider in the name of the customer as sender will be verified pursuant to a pre-agreed security procedure, a payment order received by the receiving institution is effective as the order of the customer, whether or not authorized, if:
(a) The security procedure is a commercially reasonable method of providing security against unauthorized payment orders; and
(b) The institution proves that it accepted the payment order in good faith and in compliance with the security procedure and any written agreement or instruction of the customer restricting acceptance of payment orders issued in the name of the customer. The institution is not required to follow an instruction that violates a written agreement with the customer or notice of which is not received at a time and in a manner affording the institution a reasonable opportunity to act on it before the payment order is received.

Policy/Regulation Mirrors

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