Articulation and interaction of the second and the third sub-paragraph of Article 74 (1) of the PSD2

The answer is no. Gross negligence incurs payer´s liability with no cap. In case the payer did not act with fraud or gross negligence, the payer may nevertheless be liable for lost, stolen or misappropriated payment instrument up to a maximum of 50 euros unless such a situation was not detectable to the payer or the loss was caused by acts of the PSP. Article 74(1) of Directive (EU) 2366/2015 (PSD2) - third sub paragraph - is the general rule on payer’s liability for unauthorised payment transactions. The payer shall bear all the losses relating to any unauthorised payment transactions if they are incurred by the payer i) acting fraudulently or ii) failing to fulfil one of its obligations set out in article 69 with intent or gross negligence. Article 74(1) (first subparagraph) stipulates that the payer may (it is therefore only an option for the Member State) (nevertheless) bear losses up to 50 euros for unauthorised transactions following loss, theft etc. of a payment instrument. This subparagraph is to be understood as applying in the case where the payer did not act fraudulently and had not failed to fulfil one of its obligations with intent or gross negligence. Article 74 (1) (second subparagraph) disapplies the above option to oblige the payer to bear losses up to 50 euros established in the first subparagraph a) where the payer could not know that the payment instrument was lost or stolen before it was fraudulently used (except if the payer acted himself fraudulently), and b) where the loss was caused by an act of the payment services provider, PSP (imprudent sending by post of a card + pin-code for example). Only the payer’s fraudulent act is indeed mentioned as an exception to a) above, but not negligence as such. In fine, in the overall case where the payer acted fraudulently or failed to fulfil one of its obligations set out in Article 69 PSD2 with intent or gross negligence, his liability cannot in any way be capped according to the third subparagraph of Article 74(1).