Parliamentary Secretary in the Finance Ministry Tonio Fenech opened Monday’s parliamentary debate on the amendments to the Financial Institutions Act saying that the main objective of this Bill was to implement the provisions of the directive of the European Union on payment services in the internal market.

The Payment Services Directive has as its objective the Single European Payment Area, in which citizens and businesses can make cross-border payments as easily, safely and efficiently as they can within their own countries and subject to identical charges. The Single European Payment Area is to be established by the year 2010.

In order to achieve this goal, there has been the creation of a common decision-making body, the European Payments Council, and the adoption of a road map with the aim of developing the necessary procedures, common rules and standards for European Union-wide payments. The European banking market will be widened and will be open to more competition.

Cashless payments are carried out according to different rules in each member state. It is often hard for customers to pay for something from another European Union country by direct debit.

The Payment Services Directive provides that every cross-border payment in the European Union can be treated as a domestic payment. This brings benefits not only for the providers of payment services, but for the customer as well.

The directive will bring major benefits for consumers. The advantages include permitting cross-border direct debits and allowing the use of a debit card anywhere in the euro area. Such a feature is useful for persons who do not have a credit card, or for making low-value purchases for which a credit card is often not accepted. For instance sometimes when a person goes abroad, he may not use his credit card because the establishment permits the use of credit cards only in the case of payment of sums exceeding EUR50. Only one bank account is needed for the whole euro area. Thus if a person works in another country within the European Union, the person need not open a bank account in this other country.

This directive also provides for payments to be made in a faster manner. All credit transfers without any currency conversion must be carried out at the latest by the end of the next business day (D+1 rule). The full amount specified in a payment order shall be credited without any deduction to the beneficiary. The directive also provides for the liability of the payment service user in case of misuse of a payment instrument which is limited to EUR150.

Thus once the Single European Payment Area begins to operate, a person can avail himself of paying through a debit card in another European Union member state and not only through a credit card. Mr Fenech said the Single European Payment Area will benefit also those who are in business and not only the consumer.

Opposition Member of Parliament Jose Herrera said that the Labour Party was in favour of the amendments to the Financial Institutions Act that are being proposed but criticised the way in which the bill was structured and the importance of the Maltese language in such a bill.