Interpretation of payment instrument

‘Payment instrument’ is defined under Article 4(14) of Directive 2015/2366 (PSD2) as “a personalised device(s) and/or set of procedures agreed between the payment service user and the payment service provider and used in order to initiate a payment order”. To be considered as a payment instrument within the meaning of PSD2, the fuel card must thus meet the following conditions: • be a personalised device(s) or set of procedures agreed between the payment service user and the payment service provider; and • be used in order to initiate a payment order. The latter condition must be understood in articulation with the definitions of ‘payment order’ and ‘payment transaction’ in PSD2. Accordingly, ‘payment order’ is defined in Article 4(13) PSD2 as “an instruction by a payer or payee to its payment service provider requesting the execution of a payment transaction”. ‘Payment transaction’ is defined in Article 4(5) PSD2 as “an act, initiated by the payer or on his behalf or by the payee, of placing, transferring or withdrawing funds, irrespective of any underlying obligations between the payer and the payee”. As regards the first condition – ie be a personalised device(s) or set of procedures -, it should be noted, in accordance with paragraph 70 of the Court’s judgement C 287/19 referring to the interpretation of ‘payment instrument’ in Article 4(23) of Directive 2007/64 (PSD1) held in its judgment C 616/11, that “in order to be considered as ‘personalised’, within the meaning of that provision, a payment instrument must allow the payment service provider to verify that the payment order was initiated by a user authorised to do so”. In the case described by the submitter, the fuel card allows the fuel card issuer to verify that the cardholder is a party to the deferred payment contractual agreement with the issuer, thus meeting the first condition of the definition of ‘payment instrument’. As regards the second condition – ie be used in order to initiate a payment order - it should be noted that, in the aforementioned judgement C 616/11, the Court considered that both a transfer order form signed by the payer in person and online banking constituted payment instruments insofar as both represented sets of procedures agreed between the user and the payment service provider and used by the user in order to initiate a payment order. In the case described, the presentation of the card and the process of verification of the cardholder as a party to such agreement constitute steps in the procedure allowing the cardholder to request the execution of a payment transaction resulting in a transfer of funds to the fuel seller. The fact that this is a payment transaction where the funds are covered by a credit line provided by the fuel card issuer to the cardholder, and which is subsequently settled, does not materially invalidate this procedural link between the steps of card presentation and cardholder verification, on the one hand, and the instruction for the execution of a payment transaction, on the other hand, thus meeting the second condition in the definition of ‘payment instrument’. Disclaimer: The answer clarifies provisions already contained in the applicable legislation. It does not extend in any way the rights and obligations deriving from such legislation; nor does it introduce any additional requirements for the concerned operators and competent authorities. The answer is 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.