The second Payment Services Directive ((EU) 2015/2366) (“PSD2”) introduced an exclusion from its scope for services based on specific payment instruments that can be used only in a limited way. Payment instruments that might benefit from the limited network exclusion (“LNE”) include notably store cards, fuel cards, membership cards, public transport cards, parking ticketing, and meal vouchers. Store cards extend to those that can only be used in a particular chain of stores or shopping centres[1]. 

Numerous market players already benefit from the exclusion. In France, these include physical stores and e-commerce platforms involved in the sale of food, parapharmaceuticals (i.e. food supplements), or event ticketing; services companies involved in carpooling, car rental or meal delivery[2] are notably concerned. Market feedback shows that the number of exempted payment institutions in France, which are not only small market players, rose sharply in recent years to reach 80 by 2021[3], including notably major food delivery and telephone service providers, and almost 1700 in the EU[4].

EBA’s Guidelines

Following a broad consultation of relevant market players [5], the European Banking Authority (“EBA”) published its final Guidelines on the LNE under PSD2 in February 2022, with the aim of contributing to the convergence of supervisory practices on a number of issues.

The Guidelines came into force on 1 June 2022 and, from a practical standpoint, their main purpose is to provide further clarification to national competent authorities (“NCAs”) on the application of the LNE, by setting criteria and factors to be taken into account in the assessment of whether the activities of the relevant entities should fall under the exclusion and not be subject to PSD2’s license requirements.

In finalising the Guidelines following its consultation, the EBA specifically addressed certain concerns raised by issuers in response to the consultation. In particular, in order for a specific payment instrument (card-based or otherwise) to be considered as limited for acquiring a very limited range of goods or services[6], a functional connection between goods and/or services that can be acquired with the payment instrument should exist[7]. The Guidelines set out that:

(i)     the issuer should identify a common purpose to ensure the goods and/or services fall within a certain category. The issuer shall then take into account several indicators[8] based on the size and specificity of the market of the issuer[9], which are relevant for a range of goods to be considered as “limited”; or

(ii)     alternatively, the issuer should apply, if applicable, a list of mandatory criteria for qualifying a network of service providers as limited including, among other aspects, that a direct contractual agreement for acceptance of payment transactions must be concluded between the issuer and each provider of the goods/services[10]. In any case, the guidelines should be interpreted in a restrictive way that does not allow for the possibility of a specific-purpose payment instrument developing into a general-purpose payment instrument[11]. 

A further issue raised by respondents to the consultation and draft Guidelines is in relation to the provision of excluded services by regulated firms and the resulting confusion for users as to the applicability of the consumer protection provisions envisaged under PSD2[12]. The Guidelines state that regulated entities should distinguish the regulated payment services from the services excluded under PSD2 in a clear and easily recognisable way, including through the provision of a specific visual manifestation. In order to provide issuers with greater flexibility in delineating between regulated and non-regulated instruments, the EBA has decided to amend the Guidelines by referring to “visual manifestation”, including inter alia a brand, logo, product name, symbol or trademark, rather than to “different brands”.

Since the publication of PSD2, the EBA has received a number of queries on the application of the LNE, largely due to the inconsistent and divergent interpretation of the Directive by different member states. However, not all queries are reflected in the final Guidelines [13]. For instance, several respondents were of the view that the EBA should set out more specific metrics in relation to the proposed criteria to determine a limited network: setting out the envisaged maximum number of providers of goods and services operating that could operate within the limited network or setting out the indicators relating to the maximum volume and value of payment transactions or the maximum number of users of the payment instrument permitted within a limited network. However, the EBA has only kept high-level indicators due to the necessity to cover a wide range of business models which are then require to be assessed on a case-by-case basis. In addition, the EBA considers that the selected indicators have been sufficiently effective to restrict the continuous growth of limited networks. 

[1]    See the EBA’s final Guidelines on the limited network exclusion under PSD2. 

[2]    See the Position 2017-P-01, dated 25 October 2017, of the French banking regulator (ACPR) on the concepts of “limited network of acceptors” and “limited range of goods and services”.

[3]    See “ACPR, New Payment Stakeholders Overview” dated 15 March 2022.

[4]    See the EBA Payment Institutions Register.

[5]    See the Consultation paper that was published on 15 July 2021: 

[6]    See Article 3(k)(ii) of PSD2. 

[7]    See Recital 13 of PSD2. 

[8]    See the high-level indicators set out in Guidelines 2.2 (limited network of service providers) and 4.4 (limited range of goods or services). 

[9]    For example, the indicators to be taken into account are the volume and value of payment transactions to be carried out with the payment instruments, the maximum amount to be credited to the payment instruments, the maximum number of payment instruments to be issued or the risks faced by the customer when using the specific payment instrument. 

[10]   See Guidelines 2 (limited network of service providers) and article 3(k)(i) of PSD2. 

[11]   See Guidelines 2 (limited network of service providers – section 2.7.). 

[12]   See Guidelines 5 (provision of services under article 3(k) of PSD2 by regulated entities).

[13]   See paragraph 3.2.4 of the Guidelines.