A study on the introduction of the EU payment accounts directive in Malta

Abstract

In light of the recent financial crises, more importance was being given to new directives. In fact, the EU is issuing new directives aiming to further protect the financial system. The main objective of the EU Payment Accounts Directive (PAD) is for customers to benefit from new services and to further minimise any conflicts that were being encountered. The PAD has three main aims. Firstly, financial institutions have to provide their service users a fee information document about any fees that they might be charged with. The second aim is to offer their service users the possibility to switch their accounts from one financial institution to another without any problems. The third aim is that clients are able to open accounts with basic features, these are intended for those that go abroad for work or to study, persons that have low turnover and persons that might retire and move to another country. These services are offered in member states within the European Union (EU). Some of the EU member states implemented PAD immediately, others took more time, while some countries have yet to implement it. In fact, Malta implemented this Directive in December, after the legal notice was issued. However, there were some amendments to this Directive from the local perspective, as the factor of "genuine interest‟ was not implemented. Since it is a Directive, EU member states can eliminate some factors from being applicable to their legislation. If it was not a Directive, than the EU member states would have to implement it within their jurisdiction as it was issued by the EU. Even though the charters have been published locally, there were still some service users that did not know about PAD. Most of the respondents that have not learnt about this Directive indicated that they would like to know more about it. Hence, financial institutions should endeavour to better inform their clients about such new services.