The European Payments Services Directive (PSD) is set to have a disruptive effect on relationships between banks and their corporate customers, according to research from TowerGroup.
The PSD is a legal foundation for the creation of an EU-wide single market for payments. As such, it has the potential to considerably alter legal and client contractual relationships between these two parties
TowerGroup says banks have yet to wake up to the implications of the PSD, having expended much of their energy on laying the groundwork for the introduction of the Single Euro Payments Area (Sepa).
The impact of the PSD will be felt at the contractual nexus between banks and their corporate clients, altering the rules governing liability in cases of loss, theft and misappropriation, unauthorised payments refund procedures, transparency in payment processing charges, credit transfer obligations and execution timeframes, and value dating terms and conditions for interest payments.
TowerGroup anticipates that sophisticated corporate organisations will seek to leverage the Directive to negotiate improved service levels with their banks. Moreover, banks will need to guide their corporate clients through the new regulatory landscape, at significant cost.
"It is imperative that banks be prepared to renegotiate contracts with all corporate and business clients," says Susan Feinberg, research director, wholesale banking. "The impact of PSD is set to be far ranging and we are concerned about the lack of awareness from both banks and the customers who will be affected."