Implementation of PSD2 in Germany - Centralised Cash Management Systems Continue to Exist

The rapid development of digitalisation, including in payments, required the definition of a framework within the European Union to establish a common basis for electronic payments.

Strengthening competition, increasing the security of payment services and protecting consumers are just a few objectives.

These new circumstances were included in the Payment Service Directive 2 (PSD2) at EU level with the revision of the Payment Service Directive (Directive (EU) 2015/2366). Derived from this was the need to transpose the Directive into national legislation. As a result, the amended Payment Services Supervision Act (ZAG) came into force on 13 January 2018 in Germany.

For centrally organised cash management systems, such as those found in the context of payment factories or shared services centres, the so-called group privilege resulted in a situation that had already been defined in the previous version of the ZAG but was commented on by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) at the end of November 2017. Accordingly, payment transactions within a group of companies (so-called intercompany payments) are subject to special treatment and do not require any special approval and therefore fall under the group privilege. However, all payment transactions that do not take place within the group of companies, both incoming and outgoing payments, require special consideration or authorisation if they are carried out centrally.

Thus, companies first faced a big question: applying for a license for these payments or a restructuring of their own processes, with the resulting reversal of the previously built centralisation with all the benefits that have resulted in particular from the creation of the Single Euro Payments Area. Companies of all sizes were affected by the BaFin interpretation.

The Association of German Treasurers e.V. then initiated an exchange with the BaFin on the interpretation of the ZAG and was asked in January 2018 to take over the coordination of the representative organisations. As part of this coordination, a total of eight associations have joined forces in order to achieve a common understanding of the legal concept of intra-group exemption.

For example, the results of a survey of companies, in which all associations participated, showed that both the application for a license (with all the resulting obligations) and a restructuring of the central processes had far-reaching organisational effects on the business operations of companies, and would be costly.

In the course of the discussions, the VDT e.V. has established contacts in other European countries through its membership in the European Association of Corporate Treasurers (EACT) in order to gain experience on the interpretation of PSD2 in other countries. At the same time, contacts were established with the European Commission, the German Ministry of Finance and the Bundesbank.

Finally, the collected findings were documented in a joint understanding letter of the associations. It has been demonstrated that the application of PSD 2 / ZAG 2018 differentiates between the different market participants in order to provide a regulatory framework for those who are "at particular risk from money laundering and terrorist financing". During the discussions it became clear that the main purpose of the ZAG interpretation is to prevent criminal financial transfers and to impede non-business-related cash flows. In several constructive discussions it was explained to BaFin why centralised cash management systems are widely used and established in the real economy. The VDT e.V. called on the members to outline their business models. The presentations were summarised and presented to BaFin anonymously.

The central processing of payment transactions by usually a group-affiliated company not only has organisational advantages, but in particular facilitates the implementation of the different legal requirements in payment transactions and thus contributes significantly to the prevention of fraud or other misuse and the creation of transparency and the centralised control of the payment transactions of a group of companies.

As a result, the associations defined requirements to be fulfilled for the operation of centralised cash management systems in order to ensure lawful conduct in payment transactions. If the companies comply with the principles laid down therein, it was agreed with BaFin that the authorisation requirement does not apply. However, companies that do not follow these principles cannot rely on the legal interpretation formulated.

In formulating the requirements, it has been ensured that both the very large and the smaller companies can meet these requirements.

The associations have also asked the Institute of Public Auditors to consider this legal interpretation in their audit implementation.

The talks with BaFin have now led to a solution and a common understanding of central cash management systems. This also illustrates the importance of association work for the representation of the interests of the members.The VDT e.V. is convinced that it was only through the bundling of interests and the inter-association cooperation with other associations that a beneficial solution for all could be achieved.

Regina Deisemann
Cornelia Hesse
VDT