The Debit and Credit Card Framework Contract and Its Influence on European Legislative Initiatives

This paper explores the significance of the “contractual mechanism” behind electronic payment transactions and its influence on European legislation. Its main purpose is to investigate how European directives see the electronic payment operation and take in account its characteristics. Card payments are divided into two distinct contractual episodes: the debit or credit card contract and the consecutive mandates given by the cardholder to his bank to pay the suppliers and to debit his account. This division seems not to be taken into account by European legislator in 2008, on Directive 2008/48/EC on credit agreements for consumers, as it was not taken in account before, in 1987. The same can be said of Directive 97/7/EC on the protection of consumers in respect of distance contracts. In contrast, Directive 2007/64/EC on payment services in the internal market (PSD) seems to be a turning point in redefining the contractual structure behind payment transaction. This directive differentiates between single payment transactions not covered by a framework contract and individual payment transactions covered by such a contract. PSD distinguishes, namely for information purposes, the framework contract and the subsequent payment orders given by the user to the payment service provider.