EBA issues Covid-19 guidance relating to electronic payments

In light of the COVID-19 crisis, the European Banking Authority (EBA) has issued important guidance to promote consumer protection and facilitate safe payments activity while current restrictions around movement and physical contact are in force. 

Maintaining a safe and effective payment system during an ongoing pandemic is a crucial emerging challenge for financial institutions, governments and regulators.  

The guidance tries to support this objective by encouraging merchants to adopt safe payment practices, reminding payment service providers of the maximum €50 (£45) limit for contactless payments, and deferring reporting requirements on SCA readiness, to give the industry more space to focus on the crisis.

What has the EBA said?

The EBA advice, issued on 25 March 2020, covers both practical and regulatory issues relating to payment services, including Strong Customer Authentication (SCA).  The EBA guidance can be found here.

Under the guidance:

  • merchants are encouraged to take all sanitary precautions necessary where in-store payments are made at a terminal via chip and PIN, and to promote alternative methods where possible, such as contactless and remote payments.
  • payment services providers should facilitate consumers’ ability to make payments without the need for physical contact, making full use of the low-value exemption from SCA at contactless payments at the point of sale. In practical terms, this means that payment service providers are encouraged to raise the contactless limit to the maximum €50 (£45 in the UK) per transaction, as permitted by the EBA’s regulatory technical standards on SCA under PSD2.
  • the requirements on card issuers and acquirers to report to national supervisory authorities (the FCA in the UK) on their readiness for SCA by 31 March 2020 has been removed.

What does this mean?

The new guidance issued by the EBA will not affect the long term direction of travel with regard to SCA, and the EBA has emphasised that other requirements relating to SCA implementation are unchanged.  Any business which accepts electronic payment methods must still be sure that it is on track to meet the revised SCA implementation deadline of 31 December 2020.

With regard to the guidance on contactless payments, the guidance has triggered prompt action to bring forward proposed increases in the contactless payment limit. By adopting an increased limited of £45 (previously £30), the UK has followed similar increases in several other European countries over the past few weeks. 

Whilst welcome, the initial focus will now be on rolling out technical changes to merchants, with the first focus likely to be on supermarkets, pharmacies and petrol stations, which are all providing vital services during the COVID-19 lockdown.

The removal of the SCA reporting deadline is a welcome and pragmatic move, but those affected by SCA changes should note that there is no other change currently proposed to the revised timetable for the overall roll-out of SCA.

During the Brexit transition period following the UK’s formal departure from the EU on 31 January 2020, the UK and the FCA remains under the jurisdiction of the EBA until 31 December 2020. At the time of writing, no transition extension to this period has been proposed or agreed and negotiations on the EU/UK post-transition relationship have been delayed by the COVID-19 outbreak.

Should you wish to discuss any aspect of this article, please contact our Payments team who will be delighted to assist. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions.


Date published

20 April 2020


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