Czech Republic: An amendment to the Act on Payment Transactions brings new benefits for consumers and broadens the range of obligations on the part of payment service providers
On 1 March 2017, an amendment to the Payment Transactions Act has come into force which implements requirements of European law regarding payment accounts and interchange fees for card-based payment transactions.
The biggest change brought about by this amendment goes by the name of “basic payment account”. Payment service providers from the ranks of banks and branch offices of foreign banks will have to open such a basic payment account for any consumer among the users of their services who asks for it. This basic payment account must be denoted in the Czech currency, and the consumer must be offered the services enumerated in the law if these services are offered also to other consumers for whom the provider administers other payment accounts (i.e., an account other than the basic payment account). This obligation to enter into an agreement on a basic payment account with the consumer upon their request does not extend to saving banks and credit unions.
Another important novelty is the option to switch one’s payment account. Switching was previously performed only by those banks who had acceded to a voluntary undertaking to such effect, contained in the Czech Banking Association’s ‘Mobility Code’. In the future, payment service providers (other than the Czech National Bank) must perform the switch if asked to do so by the user of their services. In line with this change, the amendment allows payment service providers to charge an appropriate switching fee from account holders, which must reflect the provider’s actual expenses in connection with the switch of accounts. However, this duty to switch only extends to payment accounts administered in the Czech Republic (and in the same currency). In all other cases, it remains at the specific provider’s discretion whether and on what terms it will provide the service.
The amendment also requires payments service providers to disclose pre-contractual information on the fees charged for the most common payment account services, whereas this information must be posted on the provider’s website and put on display on the provider’s business premises. Also, the provider must newly send an annual overview to the user of their services, with a breakdown of the fees paid for services associated with the user’s account (including interest payments), and must do so by the end of February of each calendar year.
Last but not least, the amendment unifies payment account terminology, in that it contains statutory definitions, uniform names and descriptions for the services related to payment accounts (as per the ČNB decrees), and sets rules for online comparisons of services related to payment accounts.
Source: Act No. 452/2016 Coll., amending Act No. 284/2009 Coll., on payment transactions, and other, related laws