Once agreed the directive will allow UK payment providers, such as credit card issuers, to significantly expand their markets by offering their services across the EU. The change will also offer benefits to consumers by increasing competition in the market leading to lower prices and a wider choice of services.

The Directive aims to deliver an EU internal market in payment services. It will harmonise the legal and technical requirements for the provision of payments services and introduces a new EU-wide licensing regime for businesses which offer payment services but which are not licensed as banks or e-money issuers. It will also support the delivery of the industry-led Single Euro Payments Area (SEPA) initiative, which is intended to enable cross-border payments in Euros to be made as cheaply, easily and efficiently as payments within individual Member States.

The consultation document builds upon the excellent cooperation with industry, consumer groups and other stakeholders on the Directive so far. We will continue to work together to secure the aims of the Directive, whilst avoiding unnecessary administrative burdens.

Ed Balls said:

"Our goal is a Payment Services Directive which further deepens the European Single Market in financial services and opens up markets for UK firms while increasing choice for UK consumers. I am determined that we work closely with the City and consumer groups to ensure that the Directive properly achieves its aims whilst maintaining a proportionate and light touch regulatory environment."