Clarification of remote payment for dynamic linking

Article 4(24) of Directive 2015/2366/EU (PSD2) defines ‘credit transfer’ as ‘a payment service for crediting a payee’s payment account with a payment transaction or a series of payment transactions from a payer’s payment account by the payment service provider which holds the payer’s payment account, based on an instruction given by the payer’. Given that the credit transfers are by definition payer-initiated electronic payments, strong customer authentication (SCA) applies, in accordance with Article 97(1), point (b), PSD2. Article 97(2) PSD2 states that dynamic linking - in accordance with Article 5 of Commission Delegated Regulation (EU) 2018/389 (RTS on SCA and CSC) - applies to electronic remote payment transactions. Article 4(6) PSD2 defines remote payment transactions as “a payment transaction initiated via internet or through a device that can be used for distance communication”. In the case described by the submitter, it seems that the payer would initiate a credit transfer at a point of sale terminal (POS terminal) with contactless functionality (e.g. near field communication technology) within the premises of the merchant. Such a transaction should therefore be considered 50 as a proximity payment which would not require the application of the dynamic linking requirements under Article 97(2) PSD2. By contrast, Q&A 5367 provides further details on the application of the dynamic linking requirements to mobile initiated credit transfers initiated at a PoS with the authentication of the payer being carried out via the internet. 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.