THE PRESIDENT OF THE REPUBLIC

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1 LEGISLATIVE DECREE N. 11 OF 27 JANUARY 2010 IMPLEMENTING DIRECTIVE 2007/64/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON PAYMENT SERVICES IN THE INTERNAL MARKET, AMENDING DIRECTIVES 97/7/EC, 2002/65/EC, 2005/60/EC AND 2006/48/EC, AND REPEALING DIRECTIVE 97/5/EC THE PRESIDENT OF THE REPUBLIC Having regard to Articles 76 and 87 of the Constitution, Having regard to Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market, amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC, Having regard to Law n. 88 of 7 July 2009, providing implementing provisions to fulfil obligations stemming from Italy s belonging to the European Communities Community Law 2008, and in particular Article 32, Having regard to the Consolidated Law on Banking established by the Legislative Decree n. 385 of 1 September 1993, Having regard to Decree-Law n. 78 of 1 July 2009, converted, with amendments, by Law n. 102 of 3 August 2009 and, in particular, Article 2 thereof, Having regard to preliminary deliberation of the Council of Ministers, adopted in the Meeting of 28 October 2009, Having obtained the opinions of the competent parliamentary Commissions of the Chamber of Deputies and of the Senate of the Italian Republic; Having regard to the deliberation of the Council of Ministers, adopted in the Meeting of 22 January 2010; Acting upon the proposal by the Minister for European Policies and the Minister of the Economy and Finance, in joint agreement with the Ministers of Foreign Affairs, Interior, Justice, Economic Development, and Public Administration and Innovation; ISSUES THE FOLLOWING LEGISLATIVE DECREE: 1

2 TITLE I Definitions and Scope Article 1 Definitions 1. For the purposes of this Legislative Decree, the following definitions shall apply: a) consumer means a natural person as per Article 3(1)(a) of Legislative Decree n. 206 of 6 September 2005, and following amendments; b) payment service means any of the following business activities: 1) Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account 2) Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account 3) Execution of payment transactions, including transfers of funds on a payment account with the user's payment service provider or with another payment service provider: 3.1. Execution of direct debits, including one-off direct debits 3.2. Execution of payment transactions through a payment card or a similar device 3.3. Execution of credit transfers, including standing orders 4. Execution of payment transactions where the funds are covered by a credit line for a payment service user: 4.1. Execution of direct debits, including one-off direct debits 4.2. Execution of payment transactions through a payment card or a similar device 4.3. Execution of credit transfers, including standing orders 5. Issuing and/or acquiring of payment instruments 6. Money remittance 7. Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services. c) payment transaction means an act, initiated by the payer or by the payee, of placing, transferring or withdrawing funds, regardless of any underlying obligations between the payer and the payee; d) payment system (or exchange, clearance and settlement system ) means a funds transfer system with formal and standardised arrangements and common rules for the processing, clearance and/or settlement of payment transactions; e) payer means a natural or legal person who holds a payment account and allows a payment order from that payment account, or, where there is no payment account, a natural or legal person who gives a payment order; 2

3 f) payee means a natural or legal person who is the intended recipient of funds which have been the subject of a payment transaction; g) payment service provider means one of the following bodies: electronic money institutions and credit institutions, and, when providing payment services, banks, Poste Italiane s.p.a., the European Central Bank and other national central banks when not acting in their capacity as monetary authority or other public authorities, Member States or their regional and local authorities when not acting as public authorities; h) payment service user means a natural or legal person making use of a payment service in the capacity of either payer or payee, or both; i) framework contract means a payment service contract which governs the future execution of individual and successive payment transactions and which may contain the obligation and conditions for setting up a payment account; l) payment account means an account held in the name of one or more payment service users which is used for the execution of payment transactions; m) funds means banknotes and coins, scriptural money and electronic money as defined in Article 1(2)(h-ter) of Legislative Decree n. 385 of 1 September 1993 Consolidated Law on Banking; n) money remittance means a payment service where funds are received from a payer, without any payment accounts being created in the name of the payer or the payee, for the sole purpose of transferring a corresponding amount to a payee or to another payment service provider acting on behalf of the payee, and/or where such funds are received on behalf of and made available to the payee; o) payment order means any instruction by a payer or payee to his/her payment service provider requesting the execution of a payment transaction; p) value date means a reference time used by a payment service provider for the calculation of interest on the funds debited from or credited to a payment account; q) authentication means a procedure which allows the payment service provider to verify the use of a specific payment instrument, including its personalised security features; r) unique identifier means a combination of letters, numbers or symbols specified to the payment service user by the payment service provider and to be provided by the payment service user to identify unambiguously the other payment service user and/or his payment account for a payment transaction. In the absence of a payment account, the unique identifier only identifies the payment service user; s) payment instrument means any personalised device(s) and/or set of procedures agreed between the payment service user and the payment service provider and used by the payment service user in order to initiate a payment order; 3

4 t) micro-enterprise means an enterprise, which at the time of conclusion of the payment service contract, is an enterprise as defined in Recommendation 2003/361/EC of 6 May 2003, in force as from the date of entry into force of this Decree, or compliantly with the Decree of the Italian Minister of the Economy and Finance implementing the measures adopted by the European Commission pursuant to Article 84(b) of Directive 2007/64/EC; u) business day means a day on which the relevant payment service provider of the payer or the payment service provider of the payee involved in the execution of a payment transaction is open for business as required for the execution of a payment transaction; v) 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 payer's consent given to the payee, to the payee's payment service provider or to the payer's own payment service provider; z) Single Euro Payments Area : all the Countries joining the process of integration of payment services in euro compliantly with rules and standards set in ad-hoc documents; aa) reference exchange rate means the exchange rate which is used as the basis to calculate any currency exchange and which is made available by the payment service provider or comes from a publicly available source; Article 2 Scope 1. This Legislative Decree shall apply to payment services provided in euro or the official currency of a Member State outside the euro area or a State in the European Economic Area. 2. This Legislative Decree shall apply to none of the following: (a) payment transactions made exclusively in cash directly from the payer to the payee, without any intermediary intervention; (b) payment transactions from the payer to the payee through a commercial agent authorised to negotiate or conclude the sale or purchase of goods or services on behalf of the payer or the payee; (c) professional physical transport of banknotes and coins, including their collection, processing and delivery; (d) payment transactions consisting of the non-professional cash collection and delivery within the framework of a non-profit or charitable activity; (e) services where cash is provided by the payee to the payer as part of a payment transaction following an explicit request by the payment service user just before the execution of the payment transaction through a payment for the purchase of goods or services; (f) money exchange business, namely cash-to-cash operations, where the funds are not held on a payment account; (g) payment transactions based on any of the following documents drawn on the payment service provider with a view to placing funds at the disposal of the payee: paper cheques, paper-based bills of exchange, paper-based vouchers, paper-based traveller s cheque, paper-based postal money orders; 4

5 (h) payment transactions carried out within a payment or securities settlement system between settlement agents, central counterparties, clearance houses and/or central banks and other participants of the system, and payment service providers, without prejudice to Article 30; (i) payment transactions related to securities asset servicing, including dividends, income or other distributions, or refund or sale, carried out by persons referred to in point (h) or by investment firms, credit institutions, collective investment undertakings or asset management companies providing investment services and any other entities allowed to have the custody of financial instruments; l) services provided by technical service providers, which support the provision of payment services, without them entering at any time into possession of the funds to be transferred, including processing and storage of data, trust and privacy protection services, data and entity authentication, information technology (IT) and communication network provision, and provision and maintenance of terminals and devices used for payment services; (m) services based on instruments that can be used to acquire goods or services only in the premises used by the issuer or under a commercial agreement with the issuer either within a limited network of service providers or for a limited range of goods or services; (n) payment transactions executed by means of any telecommunication, digital or IT device, where the goods or services purchased are delivered to and are to be used through a telecommunication, digital or IT device, provided that the telecommunication, digital or IT operator does not act only as an intermediary between the payment service user and the supplier of the goods and services; o) payment transactions carried out between payment service providers, their agents or branches for their own account; (p) payment transactions between a parent undertaking and its subsidiary or between subsidiaries of the same parent undertaking, without any intermediary intervention by a payment service provider other than an undertaking belonging to the same group; (q) services by providers to withdraw cash by means of automated teller machines acting on behalf of one or more card issuers, which are not a party to the framework contract with the customer withdrawing money from a payment account, on condition that these providers do not conduct other payment services as listed in Article Title II shall apply to payment services provided within the European Community, only where both the payer's payment service provider and the payee's payment service provider are, or the sole payment service provider in the payment transaction is, located in the Community. Article 23 shall apply to payment services also where only one of the providers in located in the Community. 4. For the purposes of Title II: - payment service also means electronic money issue; - where the payment service user is not a consumer, the parties may agree Article 3(1), and Articles 5(4), 10, 12, 13, 14, 17 and 25 shall not apply in whole or in part. The parties may also agree on a time period different from that laid down in Article 9 to notify unauthorised or incorrectly executed transactions; - micro-enterprises are treated in the same way as consumers; nevertheless, the parties may agree that Articles 13, 14 and 17(3) shall not apply in whole or in part. 5

6 TITLE II RIGHTS AND OBLIGATIONS CHAPTER I Charges and Derogations Article 3 Charges applicable 1. The payment service provider may not charge the payment service user for fulfilment of its information obligations or corrective and preventive measures under this Title, unless otherwise specified in Articles 16(4),17(5) and 24(2). Where applicable, those charges shall be agreed between the payment service user and the payment service provider and shall be appropriate and in line with the payment service provider's actual costs. 2. Where a payment transaction does not involve any currency conversion by the payer s payment transaction provider, the payee shall pay the charges levied by his/her own payment service provider, and the payer shall pay the charges levied by his/her payment service provider, respectively. Where the payee is a consumer, he/she may be exempted from credit transaction charges, also including fees to pensioners and employees. 3.The payment service provider shall allow the payee to offer the payer a reduction on the asset sold or the service provided for the use of a given payment instrument within the scope of this Decree. 4. The payee shall not charge the payer for the use of a given payment instrument. The Bank of Italy may establish, with own regulation, derogations taking into account the need to encourage the use of most efficient and reliable payment instruments. 5. Provisions under this Article do not produce effects on the payment of possible charges agreed between payment service providers or entity they resort to. Article 4 Derogation for low value payment instruments and electronic money 1. In the case of payment instruments which, according to the framework contract, solely concern individual payment transactions not exceeding EUR 30 or which either have a spending limit of EUR 150 or store funds which do not exceed EUR 150 at any time, the parties in the framework contract may agree that: (a) Article 7(1)(b) and Article 8(1)(c) and (d), as well as Article 12(1) and (2) do not apply if the payment instrument does not allow its blocking or prevention of its further use; 6

7 (b) Articles 10, 11 and 12(3) and (4) do not apply if the payment instrument is used anonymously or if, for other reasons which are intrinsic to the payment instrument, the payment service provider is not in a position to prove that a payment transaction was authorised; (c) by way of derogation from Article 16(1), the payment service provider is not required to notify the payment service user of the refusal of a payment order, if its non execution is apparent from the context; (d) by way of derogation from Article 17, the payer may not revoke the payment order after transmitting the payment order or giving his/her consent to execute the payment transaction to the payee; (e) by way of derogation from Articles 20 and 21, other execution periods apply. 2. The amounts referred to in paragraph 1 shall be doubled whereby the payer's payment service provider and the beneficiary s payment service provider are registered in Italy. For prepaid payment instruments the limit is raised from EUR 150 to EUR Articles 11 and 12 shall not apply to electronic money whereby the payer's payment service provider does not have the ability to freeze the payment account or block the payment instrument, and the instrument envisages prepaid limits not higher than EUR The Bank of Italy, in implementing the measures adopted by the European Commission, may establish the application of amount limits other than as per paragraphs 1, 2 and 3. CHAPTER 2 AUTHORISATION OF PAYMENT TRANSACTIONS Article 5 Consent and withdrawal of consent 1. A payment transaction is considered to be authorised only if the payer has given consent to execute the payment transaction. In the absence of such consent, a payment transaction shall be considered to be unauthorised. 2. Consent to execute a payment transaction or a series of payment transactions shall be given in the form and compliantly with the procedure agreed in the framework contract or in the contract related to individual payment transactions. 3. A payment transaction may be authorised by the payer prior to or, if agreed between the payer and his/her payment service provider, after the execution of the payment transaction. 4. Consent may be withdrawn by the payer at any time in the form and compliantly with the procedure agreed in the framework contract or in the contract related to individual payment transactions, but no later than the point in time of irrevocability under Article 17. Consent to execute a series of payment transactions may also be withdrawn with the effect that any future payment transaction is to be considered as unauthorised. 7

8 Article 6 Limits of the use of the payment instrument 1. In order to curb losses resulting from fraud or unauthorised use of a payment instrument, where such specific payment instrument is used for the purposes of giving consent to execute payment transactions, the payer and his/her payment service provider may agree on spending limits for payment transactions executed through such payment instrument. 2. If agreed in the framework contract, the payment service provider may reserve the right to block the payment instrument for objectively justified reasons related to one or more of the following elements: a) The security of the payment instrument b) The suspicion of unauthorised or fraudulent use of the payment instrument c) In the case of a payment instrument with a credit line for its utilisation, a significantly increased risk that the payer may be unable to fulfil his/her liability to pay. 3. In the cases listed under paragraph 2, the payment service provider shall inform the payer, in an agreed manner, of the blocking of the payment instrument and the reasons thereof. Where possible, such information shall be given before the payment instrument is blocked and, at the latest, immediately thereafter, unless giving such information would compromise objectively justified security reasons or is prohibited by other relevant legislation or provisions. 4. The payment service provider shall unblock the payment instrument or replace it with a new payment instrument once the reasons for blocking no longer exist. Article 7 Obligations of the payment service user in relation to payment instruments 1. The payment service user entitled to use a payment instrument shall fulfil the following obligations: (a) use the payment instrument in accordance with the terms of the framework contract governing the issue and use of the payment instrument; and (b) notify the payment service provider, or the entity specified by the latter, without undue delay on becoming aware of loss, of theft or misappropriation of the payment instrument or of its unauthorised use. 2. For the purposes of paragraph 1(a), the payment service user shall, in particular, as soon as he/she receives a payment instrument, take all reasonable steps to keep its personalised security features safe. 8

9 Article 8 Obligations of the payment service provider in relation to payment instruments 1. The payment service provider issuing a payment instrument shall fulfil the following obligations: (a) make sure that the personalised security features of the payment instrument are not accessible to parties other than the payment service user entitled to use the payment instrument, without prejudice to the obligations on the payment service user set out in Article 7; (b) refrain from sending an unsolicited payment instrument, except where a payment instrument already given to the payment service user is to be replaced; (c) ensure that appropriate means are available at all times to enable the payment service user to make a notification pursuant to Article 7(1)(b) or, pursuant to Article 6(4), request reactivation or issue of a new payment service, where the payment service provider has not provided it. Upon request, the payment service provider shall provide the payment service user with the means to prove, for 18 months after notification, that he/she made such notification; and (d) prevent all use of the payment instrument once notification pursuant to Article 7(1)(b) has been made. 2. The payment service provider shall bear the risk of sending a payment instrument to the payer or of sending any personalised security features which enable use thereof. Article 9 Notification of unauthorised or incorrectly executed payment transactions 1. The payment service user shall obtain rectification from the payment service provider only if he/she notifies his/her payment service provider, compliantly with the terms in the framework contract or contract related to individual payment transactions, without undue delay on becoming aware of any unauthorised or incorrectly executed payment transactions giving rise to a claim, including the cases under Article 25, and no later than 13 months after the debit date, for the payer, or the credit date, for the payee. 2. The 13-month term shall not apply where the provider has failed to provide or make available the information on such payment transaction in accordance with provisions in force for transparency of conditions and information requirements for payment services as per Title VI of the Consolidated Law on Banking (Legislative Decree n. 385 of 1 September 1993). 3. A payment transaction shall be considered as incorrectly executed where the execution is not compliant with the order or the instructions given by the user to his/her payment service provider. 9

10 Article 10 Evidence on authentication and execution of payment transactions 1. Where a payment service user denies having authorised an executed payment transaction or claims that the payment transaction was not correctly executed, it is for his/her payment service provider to prove that the payment transaction was authenticated, duly recorded, entered in the accounts and not affected by a technical breakdown or some other deficiency. 2. Where a payment service user denies having authorised an executed payment transaction, the use of a payment instrument recorded by the payment service provider shall in itself not necessarily be sufficient to prove either that the payment transaction was authorised by the payer or that the payer acted fraudulently or failed with intent or gross negligence to fulfil one or more of his obligations under Article 7. Article 11 Payment service provider's liability for unauthorised payment transactions 1. Without prejudice to Article 9, in the case of an unauthorised payment transaction, the payer's payment service provider shall immediately refund to the payer the amount of the unauthorised payment transaction and, where applicable, restores the debited payment account to the state in which it would have been had the unauthorised payment transaction not taken place. 2. In the event of justified suspicion of fraud, the payment service provider may suspend the refund under paragraph 1 and immediately notify the payment service user. 3. Refund under paragraph 1 does not prevent the payment service provider from subsequently proving that the payment transaction had been authorised. In such case, the payment service provider may claim and obtain the return, by the user, of the refunded amount. 4. Further financial compensation may be determined in accordance with the law applicable to the contract between the payer and his/her payment service provider. Article 12 Payer's liability for unauthorised use of payment instruments or payment transactions 1. The payer shall not bear any financial consequences resulting from use of a lost, stolen or misappropriated payment instrument after notification in accordance with Article 7(1)(b), except where he/she has acted fraudulently. 2. If the payment service provider did not respect the obligations as per Article 8(1)(c), the payer shall not be liable for the financial consequences resulting from the use of the lost, stolen or misappropriated payment instrument, except where he/she has acted fraudulently. 10

11 3. Except where the user has acted with intent or gross negligence, or if he/she has failed to keep the personalised security features safe from the misappropriation of a payment instrument prior to the notification in accordance with Article 7(1)(b), the user himself/herself shall bear the losses relating to any unauthorised payment transactions, up to a maximum of EUR 150, resulting from the use of a lost or stolen payment instrument. 4. Where the payer has acted fraudulently or with intent or gross negligence failed to fulfil his/her obligations under Article 7, the user shall bear all the losses relating to any unauthorised payment transactions and the maximum EUR 150 amount under paragraph 3 of this Article shall not apply. 5. The Bank of Italy, through own provisions, may reduce the maximum liability referred to in paragraphs 3 and 4 of this Article in the event of payment instruments having particular security features. The Bank of Italy shall ensure the general knowledgeability of the payment instruments fulfilling such security features. Article 13 Refunds for payment transactions initiated by or through a payee 1. The payer is entitled to being refunded by his/her payment service provider of an authorised payment transaction initiated by or through a payee and already executed, if the following conditions are met: a) The authorisation did not specify the exact amount of the payment transaction at the moment the authorisation was issued; (b) The amount of the payment transaction exceeded the amount the payer could reasonably have expected taking into account his/her previous spending pattern, the conditions in his/her framework contract and relevant circumstances of the case. 2. At the payment service provider's request, the payer shall provide documents and any further factual elements proving the conditions under paragraph 1. The refund consists of the full amount of the executed payment transaction. For direct debits the payer and his/her payment service provider may agree in the framework contract that the payer is entitled to a refund from his/her payment service provider even though the conditions for refund in paragraph 1 are not met. 3. However, for the purposes of paragraph 1(b), the payer may not rely on currency exchange reasons if the reference exchange rate agreed with his/her payment service provider was applied. If the reference exchange rate concerns a payment transaction in the framework contract, such contract shall specify the agreed calculation method of the actual interest, the relevant date as well as the index or base applied to determine such reference exchange rate. 4. It may be agreed in the framework contract between the payer and the payment service provider that the payer has no right to refund, if the following conditions are both met: a) The payer has authorised to execute the payment transaction directly to his/her payment service provider; 11

12 b) Where applicable, if the payer s authorisation was issued before the payment transaction execution, information on the future payment transaction was provided or made available in an agreed manner to the payer at least four weeks before the due date by the payment service provider or by the payee in accordance with the framework contract terms. Article 14 Requests for refunds for payment transactions initiated by or through a payee 1. The payer can request the refund referred to in Article 13 within eight weeks from the date on which the funds were debited. 2. Within ten business days of receiving a request for refund, the payment service provider shall either refund the full amount of the payment transaction or provide justification for refusing the refund. In the latter case, the payment service provider shall inform the payer of his/her right to submit a complaint to the Bank of Italy or, where the payer does not accept the justification provided, to out-of-court procedures in accordance with Article 128-bis of the Consolidated Law on Banking, as per Legislative Decree n. 385 of 1 September The payment service provider's right to refuse the refund shall not apply in the case of direct debit, where the payer and the payment service provider have agreed in the framework contract the payer is entitled to the refund regardless of whether the conditions set out in Article 13(1) are actually met. CHAPTER III EXECUTION OF PAYMENT TRANSACTIONS SECTION I PAYMENT ORDERS AND AMOUNTS TRANSFERRED Article 15 Receipt of payment orders 1. The point in time of receipt is the time when the payment order transmitted directly by the payer or indirectly by or through a payee is received by the payer's payment service provider. If the point in time of receipt is not on a business day for the payer's payment service provider, the payment order shall be deemed to have been received on the following business day. The payment service provider may establish a cut-off time, near to the end of a business day and taking into account also the ways through which the payment order is transmitted, beyond which any payment order received shall be deemed to have been received on the following business day. 12

13 2. If the payment service user initiating a payment order and his/her payment service provider agree that execution of the payment order shall start on a specific day or at the end of a certain period or on the day on which the payer has set funds at his/her payment service provider's disposal, the point in time of receipt is deemed to be the agreed day. If the agreed day is not a business day for the payment service provider, the payment order received shall be deemed to have been received on the following business day. Article 16 Refusal of payment orders 1. In cases where all the conditions set out in the payer's framework contract are met, the payer's payment service provider shall not refuse to execute an authorised payment order irrespective of whether the payment order is initiated by the payer or by or through the payee, unless prohibited by other relevant Community or national legislation. 2. Where the payment service provider refuses to execute a payment order, the refusal and, if possible, the reasons for it and the procedure for correcting any user s factual mistakes that led to the refusal shall be notified to the payment service user, unless prohibited by other relevant Community or national legislation. 3. The payment service provider shall provide or make available the notification under paragraph 2 as agreed with the user and at the earliest opportunity, and in any case within the periods established in Article 20 for payment transaction execution. 4. The framework contract may include a condition that the payment service provider may charge for such a notification if the refusal is objectively justified. 5. For the purposes of Articles 20 and 25, where a payment order execution is refused and such refusal is objectively justified, the payment order shall not be deemed as received. Article 17 Irrevocability of a payment order 1. The payment service user may not revoke a payment order once it has been received by the payer's payment service provider, unless otherwise specified in this Article. 2. Without prejudice to Article 5(4), where the payment transaction is initiated by or through the payee, the payer may not revoke the payment order after transmitting the payment order or giving his/her consent to execute the payment transaction to the payee. 13

14 3. In the case of direct debit and without prejudice to refund rights, the payer may revoke the payment order at the latest by the end of the business day preceding the day agreed for debiting the funds. Whereby conditions and timing for revocation allow it, the payment service provider shall immediately notify the payee s payment service provider that the order has been revoked. 4. In the case referred to in Article 15(2) the payment service user may revoke a payment order at the latest by the end of the business day preceding the agreed day. 5. After the time limits specified in paragraphs 1 to 4, the payment order may be revoked only if agreed between the payment service user and his/her payment service provider. In the cases referred to in paragraphs 2 and 3, the payee's agreement shall also be required for revoking the order. If agreed in the framework contract, the payment service provider may charge for revocation. 6. In any case, the revocation of a payment order has effect only within the relation between the payment service provider and the service user, without prejudice to the definite character of payment transactions within payment systems. 7. Irrevocability of a payment order shall not prevent the payer from being refunded with the executed payment transaction amount, in the event of controversy between the payer and the payee. 8.Within the framework contract, consent to execute a payment transaction may be revoked in the form and following the procedure agreed between the user and the payment service provider. Article 18 Amounts transferred and amounts received 1. Payment service providers shall transfer the full amount of the payment transaction and refrain from deducting charges from the amount transferred. 2. By way of derogation from paragraph 1, the payee and his/her payment service provider may agree that the payment service provider deduct its charges from the amount transferred before crediting it to the payee. In such a case, the full amount of the payment transaction and charges shall be separated in the information given to the payee. 3. If any charges other than those referred to in paragraph 2 are deducted from the amount transferred, the payer s payment service provider shall ensure that the payee receives the full amount of the payment transaction initiated by the payer. In cases where the payment transaction is initiated by or through the payee, his/her payment service provider shall ensure that the full amount of the payment transaction is received by the payee. 14

15 SECTION II EXECUTION AND VALUE DATE Article 19 Scope 1.This Section shall apply to: a) Payment transactions in euro; b) Cross-border payment transactions involving single currency conversion between the euro and the currency of a Member State outside the euro area, provided that the cross-border transactions take place in euro and the required currency conversion is carried out in the concerned Member State outside the euro area. 2. Without prejudice to Article 2, this Section shall apply to other payment transactions, unless otherwise agreed between the payment service user and his/her payment service provider. However, Article 23, not subject to contract derogation, shall always apply. When the payment service user and his/her payment service provider agree on a longer period than as per Article 20, such period shall not exceed four business days following the point in time of receipt of the payment order. Article 20 Payment transactions to a payment account 1. The payer's payment service provider shall ensure that, after the point in time of receipt, the amount of the payment transaction is credited to the payee's payment service provider's account at the latest by the end of the next business day. Until 1 January 2012, the parties of a contract providing payment services may agree on an execution period other than above, or refer to the period regulating payment instruments in the Single Euro Payments Area, which however may not exceed three business days. Until 1 January 2012, such period may be extended by a further business day for paper initiated payment transactions. 2. The payee s payment service provider shall value-date and make available the amount of the payment transaction to the payee's payment account in accordance with Article The payee's payment service provider shall transmit a payment order initiated by or through the payee to the payer's payment service provider within the time limits agreed between the payee and his/her payment service provider, enabling settlement, as far as direct debit is concerned, on the agreed due date. 15

16 Article 21 Absence of payee's payment account with the payment service provider 1. Where the payee does not have a payment account with the payment service provider receiving the funds, such funds shall be made available to the payee by the payment service provider who receives the funds for the payee within the period specified in Article 20. Article 22 Cash placed on a payment account 1.Where a payment service user places cash on a payment account in the currency of such payment account, the payment service provider shall ensure that the amount is made available and value dated immediately after the point of time of the receipt of the funds. Where the payment service user is not a consumer, the amount shall be made available and value dated at the latest on the next business day after the receipt of the funds. Article 23 Value date and availability of funds 1. The credit value date for the payee's payment account is no later than the business day on which the payment transaction amount is credited onto the payee's payment service provider account. 2. The payee s payment service provider shall ensure that the amount of the payment transaction is at payee's disposal immediately after that amount is credited onto the payee's payment service provider account. 3. The debit value date for the payer's payment account shall be no earlier than the business day on which the payment transaction amount is debited to that payment account. 4. This Article shall not apply in the event of rectification of unauthorised or incorrectly executed payment transactions, or where errors have prevented correct execution thereof. SECTION III LIABILITY Article 24 Incorrect unique identifiers 1. If executed in accordance with the unique identifier, a payment order shall be deemed to have been correctly executed with regard to the payee and/or the account specified by the unique identifier. 16

17 2. If the unique identifier provided by the payment service user is incorrect, the payment service provider shall not be liable under Article 25 for non-execution or defective execution of the payment transaction. However the payer's payment service provider shall make reasonable efforts to recover the funds involved in the payment transaction. If agreed in the framework contract, the payment service provider may charge the payment service user for recovery of funds. 3. The payment service provider shall be liable only for the execution of payment transactions in accordance with the unique identifier provided by the payment service user, also where the latter provides his/her payment service provider with information additional to the unique identifier. Article 25 Non-execution or defective execution 1. Where a payment order is initiated by the payer, his/her payment service provider shall, without prejudice to Article 9, Article 24(2) and (3), and Article 28, be liable to the payer for correct execution of the payment transaction, unless he/she can prove to the payer and, where relevant, to the payee's payment service provider, that the payee's payment service provider received the amount of the payment transaction in accordance with Article 20(1). In such a case, the payee's payment service provider shall be liable to the payee for correct execution of the payment transaction. 2. Where the payer's payment service provider is liable under paragraph 1, he/she shall without undue delay refund to the payer the amount of the non-executed or defective payment transaction and, where applicable, restore the debited payment account to the state in which it would have been had the defective payment transaction not taken place. 3. In the cases listed in paragraph 2, the payer may elect not to be refunded and confirm execution of the payment transaction, without prejudice to the rectification right as per Article 9 and liability as per paragraph Where the payee's payment service provider is liable under paragraph 1, he/she shall immediately place the amount of the payment transaction at the payee's disposal and credit the corresponding amount to the payee's payment account. 5. Without prejudice to Article 9, Article 24(2) and (3), and Article 28, where the payment order is initiated by or through the payee, the payee s payment service provider: a) Is liable to the payee for correct transmission of payment order to the payer s payment service provider in accordance with Article 20(3); b) Shall transmit without delay the concerned payment order to the payer s payment service provider; c) Is liable to the payee for compliance with Article

18 6. Where the payee's payment service provider is not responsible for a non-executed or defectively executed payment transaction under paragraph 5, the payer's payment service provider shall be liable to the payer and shall refund to the payer the amount of the non-executed or defective payment transaction without delay. The payment service provider restore the debited payment account to the state in which it would have been had the defective payment transaction not taken place. 7. Regardless of liability under paragraphs 1 to 6, in the case of a non-executed or defectively executed payment transaction, the concerned payment service providers shall make immediate efforts, upon respective users request, to trace the payment transaction and notify the payee of the outcome. 8. In addition, payment service providers shall be liable to their respective payment service clients for any charges and any interest to which the payment service user is subject as a consequence of nonexecution or defective execution of the payment transaction. Article 26 Additional financial compensation 1. Any financial compensation additional to that provided for under this Section may be determined in accordance with the law applicable to the contract concluded between the payment service user and his/her payment service provider. Article 27 Right of recourse 1. Where the liability of a payment service provider under Article 25 is attributable to another payment service provider or to any intermediary, that payment service provider or intermediary shall compensate the first payment service provider for any losses incurred or sums paid pursuant to Article Further financial compensation may be determined in accordance with agreements between payment service providers and the law applicable to such agreement. Article 28 No liability 1. Liability under Articles 5 to 27 shall not apply in cases of abnormal and unforeseeable circumstances or due to force majeure (beyond the control of the party pleading for the application of those circumstances, the consequences of which would have been unavoidable despite all efforts to the contrary), or where a payment service provider is bound by other legal obligations. 18

19 CHAPTER IV DATA PROTECTION Article 29 Data protection 1. Payment systems and payment service providers may process personal data whereby necessary to safeguard the prevention, investigation and detection of payment fraud. The processing of such personal data shall be carried out in accordance with Legislative Decree n. 196 of 30 June CHAPTER V ACCESS TO PAYMENT SYSTEMS Article 30 Access to payment systems 1. Pursuant to Article 146(2)(b) of Legislative Decree n. 385 of 1 September 1993, the Bank of Italy shall verify that the rules issued by payment systems managers on access of authorised legal persons performing payment services are indeed objective, non-discriminatory and proportionate, and that such rules do not inhibit access more than is necessary to safeguard against specific risks such as settlement risk, operational risk and business risk, and to protect the financial and operational stability of the payment system. 2. For the purposes of paragraph 1, the rules regulating the access to payment systems shall impose on payment service providers, payment service users and other payment systems none of the following requirements: a) Any restrictive rule on effective participation in other payment systems; b) Any rule discriminating between authorised payment service providers and registered payment service providers in relation to the rights, obligations and entitlement of participants; c) Any restriction on the basis of institutional basis. 3. Paragraphs 1 and 2 shall not apply to: a) Payment systems designated under Legislative Decree n. 210 of 12 April 2001; b) Payment systems composed exclusively of payment service providers belonging to a group of entities linked by capital where one of the linked entities enjoys effective control over the other linked entities; c) Payment systems where a sole payment service provider: 1) Acts or can act as the payment service provider both for the payer and the payee, and is exclusively responsible for the management of the system; 2) Licenses other payment service providers to participate in the system and the latter have no right to negotiate fees among them in relation to the payment system, although they may establish their own pricing in relation to service payment users. 19

20 CHAPTER VI IMPLEMENTING MEASURES Article 31 Implementing measures 1. For the purposes of Article 146 of Legislative Decree n. 385 of 1 September 1993, the Bank of Italy shall issue general provisions or in particular aiming to: (a) Ensure implementation of this Title (b) Adopt implementing measures designed by the European Commission pursuant to Article 84 (a) and (c) and Directive 2007/64/EC. Article 32 Sanctions 1. In the event of infringement of obligations as per Articles 3, 9, 11, 18, 23 and 25 of this Decree and related implementation measures perpetrated by subjects performing administrative or directing functions and employees of payment service providers, an administrative pecuniary sanction ranging between EUR 20,000 and EUR 200,000 shall apply. 2. In the event of infringement of obligations as per Articles 8, 16, 20, 21 and 22 of this Decree and related implementation measures perpetrated by subjects performing administrative or directing functions and employees of payment service providers, an administrative pecuniary sanction ranging between EUR 10,000 and EUR 100,000 shall apply. 3. The sanctions under paragraphs 1 and 2 shall also apply to subjects performing control functions and either violating such prescribed rules or not having properly vigilated so as to ensure compliance with such rules by others. 4. The administrative pecuniary sanctions on employees as per paragraphs 1 and 2 shall also apply to those operating within the organisation of the payment service provider on the basis of relations other that direct employment. 5. Whereby such violations are reiterated, without prejudice to the envisaged application of administrative pecuniary sanctions, suspension of payment services provision may be imposed as per Article 146(2) of Legislative Decree n. 385 of 1 September 1993, as amended by this Decree. 6. In the event of payment services provided by payment service providers established in Italy or by agents or branches of other Member States payment service providers operating under freedom of establishment regime in Italy, sanctions as per this Article shall be imposed by the Bank of Italy, pursuant to Article 145 of Legislative Decree n. 385 of 1 September

21 TITLE III PAYMENT INSTITUTIONS Article 33 Discipline 1. In the Consolidated Law on Banking, as per Legislative Decree n. 385 of 1 September 1993, Title V-bis shall be followed by: TITLE V-ter PAYMENT INSTITUTIONS Article 114-sexies Payment services 1. Payment services may be exclusively provided by banks, electronic money institutions and payment institutions. Compliantly with relevant legislation, payment services may also be provided by the European Central Bank, EU central banks, the State of Italy and the other EU Member States, as well as State, regional and local public administrations, and Poste Italiane. Article 114-septies Registration 1. The Bank of Italy shall list authorised payment institutions in an ad-hoc register, identifying the payment services for which the single payment institutions are authorised, and their related agents and branches, as well as subsidiaries of EU payment institutions settled in the territory of the Republic of Italy. Such register shall be publicly available for consultation, accessible on line, and updated on a regular basis. 2. Payment institutions shall display their registration on own documents, acts and correspondence. 3. Payment institutions may provide payment services in Italy only through financial agents in compliance with Legislative Decree n. 374 of 25 September 1999, as well as through other subjects authorised to provide payment services as per Article 114-sexies. Article 114-octies Executable ancillary activities 1. In addition to the provision of authorised payment services, payment institutions may also execute the following ancillary activities: a) Granting credit closely related to the provided payment services within the limits and under the conditions established by the Bank of Italy; 21