Merchant Initiated Transactions exemption for hotel transactions

Q&A 2019_4791 clarifies that where payment card details are taken as a guarantee at the time of making a reservation, in order for potential further payments initiated by the payee (the hotel) to be considered as payee-initiated transactions, strong customer suthentication (SCA) would need to be applied when providing the mandate and all other conditions in Q&A 2018_4031 should be met. As stated in Q&A 2018_4031 , where the mandate of the payer to the payee to initiate a transaction is provided through a remote channel (for example at the time of reservation with credit card details taken only as a guarantee), the setting up of such a mandate is subject to strong customer authentication, as this action may imply a risk of payment fraud or other abuses within the meaning of Article 97(1)(c) of the Directive 2015/2366/EU (PSD2). The payment transactions initiated by the payee that are based on the mandate are subject to the general provisions of PSD2 that apply to payee initiated transactions (e.g. Articles 75-78 PSD2).   Disclaimer: The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.