The amendments will ensure that users can choose the payment services that are relevant to them.
“With the proposed changes, we aim to provide more freedom of choice and clarity to consumers – so that they can choose exactly the services or service baskets they need, and payment service providers cannot unilaterally impose products or services that consumers do not need,” says Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania.
Currently, the user can pay for each payment service and transaction separately or choose a basket of payment services, where payment services are charged at a fixed monthly rate.
Most often, payment service baskets include only payment services, such as account management, fund transfers, payment card, cash transactions. However, recently there has been a practice of including other services not related to payments (for example, insurance) to the basket of payment services. They can be bundled (services can be purchased separately, but potentially more expensive) or bundled (services can only be purchased together).
The user, for whom additional services are relevant, gets the opportunity to use them, probably on more favorable terms than when buying them separately.
However, if products or services not related to payment services are not needed by the user, he basically does not have the opportunity to refuse them, without also refusing the available payment services, and does not receive information on how much they would cost separately.
In the opinion of the Bank of Lithuania, such practice is not favorable to the consumer, therefore it submits the following proposals to the Ministry of Finance regarding the amendment of the provisions of the Law on Payments:
- the user must always be given the opportunity to use the payment account and the services separately, without a product not related to the payment services;
- payment service providers will have to clearly and comprehensibly provide the user with information about service rates in both cases: when they are linked or grouped and when payment services are purchased separately;
- the service provider will not be able to unilaterally start providing linked or grouped services, it will have to obtain the user’s consent.
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#Bank #Lithuania #users #decide #additional #services #providers #impose #Business
2024-09-06 06:55:26
New Amendments to Ensure Users Have Freedom of Choice in Payment Services
The Bank of Lithuania has announced plans to introduce new amendments to the Law on Payments, aimed at providing users with more freedom of choice and clarity when it comes to payment services. The proposed changes are designed to prevent payment service providers from unilaterally imposing products or services that users do not need, and to ensure that users have the ability to choose the payment services that are relevant to them.
The Current State of Payment Services
Currently, users can either pay for each payment service and transaction separately or choose a basket of payment services, which are charged at a fixed monthly rate. Payment service baskets often include essential services such as account management, fund transfers, payment card, and cash transactions. However, in recent times, there has been a trend of including other services not related to payments, such as insurance, into these baskets. These services can be either bundled, where users can purchase them separately but at a higher cost, or tied, where users can only purchase them together.
While this practice may provide users with the opportunity to use additional services at a potentially lower cost, it can also be detrimental to users who do not need these services. Users may be forced to purchase services they do not need, without being given the option to refuse them or being informed of their separate costs.
Proposed Amendments
The Bank of Lithuania has identified this practice as unfavorable to consumers and has proposed the following amendments to the Law on Payments:
- Separate Payment Services: Users must always be given the opportunity to use payment accounts and services separately, without any additional products or services not related to payment services.
- Clear and Comprehensible Information: Payment service providers will be required to clearly and comprehensibly provide users with information about service rates in both cases: when services are linked or grouped, and when payment services are purchased separately.
- User Consent: Service providers will not be able to unilaterally start providing linked or grouped services. They will have to obtain the user’s consent before doing so.
Benefits for Users
These proposed amendments will provide users with more freedom of choice and clarity when it comes to payment services. Users will be able to choose the payment services that are relevant to them, without being forced to purchase additional services they do not need. This will lead to more transparency and fairness in the payment services market.
Quotes
“With the proposed changes, we aim to provide more freedom of choice and clarity to consumers - so that they can choose exactly the services or service baskets they need, and payment service providers cannot unilaterally impose products or services that consumers do not need,” says Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania.
Conclusion
The proposed amendments to the Law on Payments will have a significant impact on the payment services market, providing users with more freedom of choice and clarity. By ensuring that users have the ability to choose the payment services that are relevant to them, the Bank of Lithuania is promoting a more transparent and fair market.
