Payment Services

The new Payment Services Directive (PSD II) will come into force in January 2018, which means PSD II will be in place before the UK exits the EU. However, its relevance after Brexit is unclear. The PSD II regulation is broadly regarded as disruptive as it opens access for third party providers to initiate payments services and to provide aggregated views of customer accounts. Although PSD II will apply within the EEA, it is uncertain whether fintechs and other third party providers can rely access of such business models on UK regulation.

As regards payment systems, payment service providers can chose from a range of payment systems, such as retail euro systems like STEP2 and more wholesale systems like EURO1 and TARGET2. Access to these payment systems will depend on the outcome of a transitional agreement which might result in less favorable conditions with result higher fees and longer settlement times.

Continuing membership in the Single Euro Payments Area (SEPA) will also depend on the UK´s compliance with the eligibility criteria for the SEPA schemes.

Finally, assuming that the UK will not become part of the EEA, Sterling will no longer be an EU currency.