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General Information
Retail payments include consumer
and corporate payments, constituting the bulk of payment transactions
within the economy, but exclude high-value
payments generated within the interbank space.
While it is cash that constitutes legal tender, and is thus the
basis for the monetary system, its drawbacks are becoming increasingly
evident
in the modern economy. In particular, its use entails that it
must be carried to a payee, it is inefficient to process and handle, and
it escapes
the banking system and thus is prone to use in money laundering
and terrorist financing. Retail payments are instead increasingly being
carried out
by non-cash payment instruments, including credit and debit cards,
credit transfers and direct debits. While cheques have been the traditional
non-cash
payment instrument in Malta, electronic payment services are
gradually bringing the costs and inefficiencies of cheque processing to
light.
Efficient and reliable payment
services are essential for the smooth functioning of the economy.
The introduction of the euro should provide
an important contribution to Malta's retail payment infrastructure.
However, while the euro area is a single currency area in respect
of cash, work
is still in progress in respect of other payment instruments
and services. Citizens and businesses alike can only benefit
fully from the European
Union’s principles of free movement of goods, services, capital
and people if they are able to transfer money rapidly, reliably
and cheaply from one part of the euro area to another.
The objective of the eurosystem in respect of retail payment services
is to create a single payments market for the euro, and therefore to deliver
domestic and cross-border payments in euro efficiently and on the same
terms. There are three key policy goals addressed: promoting transparency
of the operation of payment systems and services, monitoring the determination
of fees and charges, and promoting market access, competition and efficiency.
Within this context, the European banking industry is in the
process of creating a Single Euro Payments
Area (SEPA). SEPA is a self-regulatory
initiative conducted under the oversight of the European System
of Central Banks. The Central Bank of Malta (the Bank) has also
been involved in the domestic
introduction of the International Bank Account Number (IBAN), a set standard
for bank account numbers that uniquely identifies a customer’s bank
account held at a bank anywhere in the world.
Along with overseeing retail payment systems, the Bank may regulate
payment services and payment instruments by means of Central
Bank of Malta Directives. It also has the authority to promote
the establishment of
a bank clearing system for retail payments and to provide facilities
for that system. The Central Bank of Malta, together with six
credit institutions, has set up and is a member of the Malta
Clearing House.
Current Legislation
Legislation in respect of retail payment services includes
EC
Regulation 924/2009 on cross border payments in the Community.
This Regulation has replaced EC Regulation 2560/2001. It eliminates differences in charges for cross border and national payments in euro and applies to all electronically processed payments, including credit transfers, direct debits, cash withdrawals at cash dispensers (ATMs), debit and credit card payments and money remittance in euro, up to the value of EUR50,000 in all the EU Member States. This legislation has also superseded CBM Directive No. 3 on Cross Border Credit Transfers.
The Payment Services Directive 2007/64/EC (PSD) lays down rules on the execution of payment transactions where the funds are electronic money as defined in Article 1(3)(b) of Directive 2000/46/EC. Furthermore, the PSD also lays down rules concerning transparency of conditions and information requirements for payment services, and the respective rights and obligations of payment service users and payment service providers in relation to the provision of payment services as a regular occupation or business activity. The PSD has superseded CBM Directive No. 4 on Electronic Payment Services.
The Bank has also published the following Directives under the Central Bank of Malta Act in respect of retail payment services:
Directive No. 1: The Provision and Use of Payment Services
Directive No. 2: Payment and Securities Settlement Systems
Directive No. 3 on Cross border Credit Transfers has been superseded by EC Regulation 924/2009
Directive No. 4 on Electronic Payment Services has been superseded by Directive 2007/64/EC
Link
to Malta Clearing House
Link to SEPA
Link to IBAN
Link to PSD
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