EBA Q&A 2019_5046 — Q&A — Recording of card payments [Final Q&A]

Recording of card payments

Question

If a card has both an e-money and non e-money function, how should a payment be recorded? Should the recording be different based on the type of the reporting institution (for example, depending on whether is an electronic money institution (EMI) or a bank)?

Background

Card payments should be reported differently under the EBA Guidelines on fraud under either Breakdowns C, D and/or F, depending on whether or not the card has an e-money function. However, it is not clear how card payments should be reported when the card has both an e-money and a non e-money function

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Answer

In accordance with Guidelines 2.11, 7.11 and 7.12 of the EBA Guidelines on fraud reporting under PSD2 (EBA/GL/2018/05) as amended by the EBA Guidelines EBA/GL/2020/01, data for card payments should be reported both by the payer’s payment service provider (PSP) (the issuer), and by the payee’s PSP acquiring the payment transaction (the acquirer), as follows:

from the issuer’s perspective, under the Data Breakdown C in Annex 2 of the Guidelines; and

from the acquirer’s perspective, under the Data Breakdown D in Annex 2 of the Guidelines.

By contrast, “transactions and fraudulent transactions where e-money has been transferred by an e-money provider to a beneficiary account” should be reported in accordance with Guideline 1.5 from the payer’s PSP perspective only, under the Data Breakdown F in Annex 2 of the Guidelines.

Where a card has both an e-money and a non e-money function, the reporting will depend on which function of the card was used to conduct a particular transaction. If a debit or credit card function was used, then the payment should be reported as a card payment transaction under the Data Breakdown C from the issuer’s perspective and under the Data Breakdown D from the acquirer’s perspective. By contrast, if the e-money function of the card was used, then the payment should be reported as an e-money transaction under the Data Breakdown F only by the issuer.

The type of the reporting PSP, namely whether it is an electronic money institution or a credit institution, is not a relevant criterion for determining how these transactions should be reported.

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Source: EBA original document