Select a legislative/policy area

ID 104. Payment transactions (Internal reference 102)
Initiation Back

Relevant provisions
Article 62 of Directive 2007/64/EC

Question
What is the meaning/difference of 'payments transaction initiated by payee' or 'payment transaction initiated through a payee'? Are some card transactions considered to be 'payments initiated by or through a payee'? E.g. card transactions where a fixed amount is reserved, and then later on an exact amount is debited from the card, but the user has not given authorisation for this exact amount (e.g. payments for car rentals etc.)?

Answer
A transaction initiated by the payee is a transaction which is initiated by the payee without interaction of the payer, such as a direct debit transaction (the utility company decides on when the payment order is sent to its PSP).
A transaction initiated through the payee is a transaction which is initiated by the payer through the payee, typically a card transaction (the cardholder authorises and initiates the payment at the point of sale through the terminal which connects the merchant with his acquirer).

Date
Submitted on 07/07/2008