The Payment Service Directive 2 (PSD2) is the European payment regulation that became active in January 2018 where all payments being sent and received within the EEA now have to be processed as shared payment charges. This legislation has been introduced to improve transparency on bank charges to customers in Europe.
In the past, when sending payments within the EEA and selecting ‘Payee pays all charges’, the remitting bank added an additional agents fee which was taken on top of the payment charge to cover any intermediary/beneficiary bank charges. This fee was charged to the Payers bank account.
With the introduction of PSD2, when the payment is sent the charges are automatically changed to ‘SHARED’, so separate charges are taken directly by the handling banks and no claim is made to the paying bank for the agents fee. So while accounts managed by Sarnia have a fee deducted with the payment, this does not stop additional fees being taken by the other banks in the payment chain.
Now, whenever a payment is sent to any beneficiary in the EEA it will always be released as ‘SHARED’ charges. The recipient will need to treat any bank charges charged by their bank as an expense or contact their bank directly to negotiate a refund of these charges.