One of the great benefits of the old Payment Services Directive (PSD) was that a firm only had to deal with the regulator in its home member state. If the regulator in another member state wanted to complain about a service supplied to its citizens under a 'passport', then that host state regulator had to call the home state regulator. This was particularly important given that different EEA member states have different interpretations of some aspects of the PSD.
But the new PSD2 allows each host state to require a firm operating locally through branches or agents to appoint a local "central point of contact" if they meet one or more criteria specified by the European Banking Authority:
- if the firm has 10 or more agents located in the host state, which the firm relies on for passporting under the 'right of establishment' (not on a 'cross-border service' basis);
- if the total [value/number] of payment transactions carried out by the firm in the host state in the last financial year through local agents (including cross-border service agents, so long as there are at least 2 agents operating under the right of establishment), exceeds [EUR 3 million/100,000], including transactions initiated under its payment initiation service.
Firms which trigger any one of the criteria in a host member state must notify the local regulator within 30 days (otherwise, the local regulator wouldn't necessarily know). The EBA will hold a central register of firms with local 'central points of contact'.
Each central point of contact must be able to facilitate certain reporting obligations, as well as communications with, and visits by, host state authorities.
This is intended to improve co-ordination among regulators, though it seems a lot of trouble to go to in when they can already pick up the phone.
More concerning, however, is that it also paves the way for host states to enforce their own different interpretations of PSD2...