Dáil Éireann Debate, Tuesday - 21 May 2024
223. Deputy Carol Nolan asked the Minister for Finance if he will outline the legal requirements financial institutions have to follow in terms of direct debit payments; and if he will make a statement on the matter. [22738/24]
View answerA direct debit means a payment service for debiting a payer’s payment account, where a payment transaction is initiated by the payee on the basis of the consent given by the payer to the payee, to the payee’s payment service provider or to the payer’s own payment service provider, generally known as the direct debit mandate.
Payment Service Providers (PSPs) authorised in Ireland or who provide services in Ireland on a cross-border basis, are subject to the requirements of Directive 2015/2366/EU (PSD2). PSD2 was transposed into Irish law with effect from 13 January 2018 by the European Union (Payment Services) Regulations 2018 (S.I. No. 6 of 2018) hereafter referred to as the Payment Service Regulations.
The Payment Service Regulations set out the industry requirements concerning the execution of payment transactions, which includes direct debits. The Payment Service Regulations include a number of provisions relating to direct debits including the following:
• For payment transactions initiated by a payee (e.g. direct debits), the Payment Service Regulations provide for an unconditional refund right (for valid claims) during an 8 week period from the date the funds are debited from the account.
• For direct debits, the Payment Service Regulations also specifically provide that “a payer may revoke the relevant payment order at the latest by the end of the business day preceding the day agreed for debiting the funds”.
In addition, Regulation (EU) 260/2012, the Single Euro Payments Area (SEPA) Regulation, which came into force in 2014, lays out detailed technical and business requirements in respect of direct debit transactions including but not limited to, the use of an International Bank Account Number (IBAN) and the ISO 20022 XML standard for direct debit payments in euro.
Furthermore, the European Payments Council (EPC) developed a rulebook,
www.europeanpaymentscouncil.eu/what-we-do/epc-payment-schemes/sepa-direct-debit/sepa-direct-debit-core-rulebook-and-implementation,
which establishes a set of harmonised rules, practices and standards to allow PSPs in the Single European Payments Area (SEPA) to offer direct debits to payment service users (PSUs). Scheme participants must adhere to the requirements contained within the said Rulebook.
