Payment Service Or Ancillary Service? Clarifying The Scope Of PSD2

Executive Summary

• What’s new: In a recent ruling, the European Court of Justice held that a financial service consisting of the receipt and forwarding of funds by an intermediary does not constitute a payment service within the meaning of the EU’s Second Payment Services Directive.
• Why it matters: The judgment narrows national supervisors’ broad interpretations of payment services and provides clarity for entities that provide payment transactions that are ancillary to primary services falling outside the scope of the directive.
• What to do next: Entities whose business activities have been classified as payment services by national supervisors should consider whether this judgment supports a reclassification of their activities as ancillary services that lie beyond the directive’s scope.