In coordination with the AmCham, CCIA, Ecommerce Europe, ema, eu travel tech, EuroCommerce, MRC, EFA, EPSM, European VOD Coalition, Payments Europe,  EDPIA, EPIF has shared with key policymakers of the European Commission, the European Parliament and the Council a Joint Statement on the treatment of Merchant Initiated Transactions under the Payment Services Regulation.

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.