Netherlands: Dutch Plans To Implement New Payments Laws Raise Data Protection Concerns, Says Watchdog

The government in the Netherlands has been advised to review the way it intends to implement new EU payment services rules by the country's data protection watchdog.

The Autoriteit Persoonsgegevens (AP) said a proposed 'implementation decree' in the Netherlands for the EU's revised Payment Services Directive (PSD2) "does not correctly take into account ... the General Data Protection Regulation (GDPR)".

The GDPR is a piece of EU legislation that will bring about reforms to data protection laws that have been in place since 1995. It will apply from 25 May 2018. In the Netherlands, the AP will be the authority responsible for monitoring compliance with, and enforcing, the GDPR.

In a recently issued statement, the AP noted that businesses operating in the payment services market that will be subject to the PSD2 regime will also be subject to the GDPR. It raised issue with Dutch government plans to pass responsibility for the protection of personal data relating to the provisions of PSD2 to the country's central bank – De Nederlandsche Bank.

The watchdog said that it should be given responsibility for "the entire supervision of the protection of personal data in the context of payment services" due to the cross over between PSD2 and the GDPR.

Under PSD2, banks, building societies and other account holding institutions are obliged to enable third party 'account information service providers' (AISPs) and 'payment initiation service providers' (PISPs) to access the payment account data they hold on customers, at those customers' request, to allow the businesses to provide the customers with their services.

The legal reforms are expected to trigger greater competition and innovation in the payments market, with fintechs, technology companies and retailers among those expected to develop AIS or PIS offerings.

PSD2 was supposed to be effective in national laws across EU member states by 13 January this year, however the proposed revised Payment Services Directive Act in the Netherlands is still to be enacted. The draft legislation is currently before the House of Representatives, the second chamber in the Dutch parliament, according to the AP.

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