While EPIF welcomes the EBA’s objective to enhance supervisory transparency and convergence for non‑ICT third‑party arrangements, we recommend four refinements to improve proportionality and efficiency for both supervisors and in-scope entities:

• Registry vs. notification obligations
Maintain the Section 10 documentation principle and rely on periodic registry submissions (plus targeted supervisory engagement) and suggesting the avoidance of systematic ad‑hoc notifications for relevant arrangements.

• Section 4 clarity
Make the criteria for “material impairment” more explicit and provide illustrative consequences, together with examples of critical functions to promote harmonized classification.

• Scope delineation
Include an illustrative list of out‑of‑scope services and lead a supervisor‑led consultation to publish a non‑binding taxonomy of typically non‑critical, non‑ICT categories.

• Additional guidance on subcontracting and ICT dependencies
We recommend the EBA clarify what in-scope entities can reasonably require from third-party providers regarding subcontractor oversight. Also, guidance is needed in relation to the management of cases where a non-ICT vendor relies on an ICT subcontractor. Considering the possible convergence between the non-ICT framework and DORA, there is a need to seek proportionate solutions.

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In this paper, we address key issues for the non-bank sector, such as the importance of allowing users to hold digital euro in multiple wallets linked to any payment account, have a narrow list of basic services in the Regulation, and guarantee a sustainable business model and a fair compensation model for PSPs.

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The Joint Statement has been shared with key policymakers of the European Commission, the European Parliament and the Council.

The European Commission proposal introduces an unconditional refund right for merchant-initiated transactions (#MITs). While we acknowledge that direct debits (#DDs) and Merchant Initiated Payments (MITs) are both transactions initiated by the payee, it is important to recognise that DDs and MITs have diverging set-up characteristics and widely different use cases.

MITs are commonly used for online businesses, e-commerce and digital content. The leaves no possibility for merchants to recover any physical goods or digital services received by the payer. If implemented, the proposal is likely to create new avenues for fraud. This will be highly detrimental to the merchant ecosystem and particularly smaller merchants who will bear a heavy operational and financial burden.

The existing framework already gives consumers the possibility to easily dispute MIT transactions within eight weeks (e.g., via the refund right in Article 76 PSD2). These rules rightly balance the rights of consumers and merchants, by giving merchants the possibility of disputing a refund request.

The industry would encourage co-legislators to consider removing the European Commission’s excessive proposals.

The post Updated Joint Statement on MITs under the PSR appeared first on Payment Institutions.

The European Commission proposal introduces an unconditional refund right for merchant-initiated transactions (MITs). While we acknowledge that direct debits (DDs) and Merchant Initiated Payments (MITs) are both transactions initiated by the payee, it is important to recognise that DDs and MITs have diverging set-up characteristics and widely different use cases.

MITs are commonly used for online businesses, e-commerce and digital content. The leaves no possibility for merchants to recover any physical goods or digital services received by the payer. If implemented, the proposal is likely to create new avenues for fraud. This will be highly detrimental to the merchant ecosystem and particularly smaller merchants who will bear a heavy operational and financial burden.

The existing framework already gives consumers the possibility to easily dispute MIT transactions within eight weeks (e.g., via the refund right in Article 76 PSD2). These rules rightly balance the rights of consumers and merchants, by giving merchants the possibility of disputing a refund request.

The industry would encourage co-legislators to consider removing the European Commission’s excessive proposals.

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This letter highlights industry’s concerns on what information ICT should or should not include in the national registers of ICT providers for the financial services industry. These registers have become mandatory under DORA.

We are noticing that national competent authorities are adopting different approaches and supervisory expectations as to what ICT services should or should not be included in the registers.

The industry would welcome if the European Supervisory Authorities (ESAs), as part of their mandate to promote supervisory convergence across the EU, could work towards a common approach and understanding on what regulated entities should or should not include in the registers.

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Here are a few key takeaways from our submission:

• Strong call for a risk-based approach
  EPIF urges the EBA to preserve flexibility by ensuring that AML requirements are applied based on demonstrated risk levels and actual transaction behaviour, rather than a one-size-fits-all model across low-, medium-, and high-risk categories.
• Support for digital identity and innovation
  EPIF calls for harmonisation of eIDAS data across the EU, and the promotion of API-based and digital-first onboarding solutions – stressing that non-face-to-face onboarding should not be automatically deemed riskier.
• Clarification needed on key definitions and procedures
  EPIF raises concerns about ambiguities around definitions and requirements for proof of place of birth or beneficial ownership, especially in jurisdictions lacking central registries or standardized documents.
• Concerns over proportionality in customer due diligence
  EPIF highlights the need to calibrate document requirements according to risk levels. Applying the same stringent rules to low-risk clients could hinder efficiency and innovation without improving AML controls. This also applies to low-value e-money products: clear, risk-based rules set by Level 1 legislation should not be constrained by overly prescriptive RTS criteria.
• Recommendations on sanctions and supervisory measures
  Before imposing pecuniary penalties, EPIF recommends that authorities allow entities time to submit an action plan and show remediation progress.

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