The limited network exclusion stems from PSD2 (2015/2366/EU) and is implemented in the Netherlands in article 1:5a(2)(k) of the Dutch Act on Financial Supervision (Wet op het financieel toezicht). On the basis of the limited network exception, the provision of services in relation to a specific payment instrument is exempted from the definition of “payment services”, as a result of which a party that (only) offers these services does not need a license as a payment service provider. Such a party does have a notification duty with Dutch Central Bank (De Nederlandsche Bank N.V., DNB) if the total value of payment transactions executed over the preceding 12 months exceeds the amount of EUR 1 million. In practice, the limited network exclusion is mostly used by card issuers (for example, issuers of gift cards, customer cards and saving cards). The limited network exclusion can be used when the relevant payment instrument meets a specific need and allows payment transactions for the purchase of goods or services and can only be used (i) within a limited network of service providers or (ii) for a very limited number of goods or services. However, due to a lack of clarity from the legislator, it is not always clear for market parties when there is a 'limited network of service providers' or a 'very limited number of goods or services'.

Following the publication of PSD2 (2015/2366) in November 2015, the EBA and the European Commission have received a number of queries in relation to the application of the limited network exclusion on the basis of Article 3(k) of PSD2. In answering the various queries in relation to the limited network exclusion, it became clear that the implementation and application of the requirements differ between Member States. In order to improve uniform application at EU level, EBA published Guidelines on the limited network exclusion under PSD2 on 24 February 2022. For the text of the Guidelines, click here.

The Guidelines

The Guidelines consist of seven guidelines that provide specifications, indicators and criteria to the national competent authorities in order to achieve a harmonised application of the limited network exclusion and to limit any potential risks that may arise for users of payment instruments that fall under the limited network exclusion. In the Guidelines, criteria and additional indicators are mentioned to assess whether a specific payment instrument can benefit from the limited network exclusion.

The seven guidelines provide guidance on the:

  • specific payment instruments under Article 3(k) of PSD2;
  • limited network of service providers under Article 3(k)(i) PSD2;
  • instruments used within the “premises” of the issuer under Article 3(k)(ii) PSD2;
  • limited range of goods and services under Article 3(k)(ii) PSD2;
  • provision of services by regulated entities under Article 3(k) PSD2;
  • notification to be made on the basis of Article 37(2) PSD2; and
  • limited network under Article 3(k)(iii) P

For issuers of payment instruments, guideline 4 is of particular relevance. In order for a specific payment instrument to be considered as limited for acquiring a very limited range of goods or services, a functional connection between the goods and/or the services that can be acquired with the payment instrument should exist. Guideline 4 clarifies under which circumstances such functional connection exists and what constitutes functionally connected goods and services.

On the basis of PSD2, it is required that an issuer of a payment instrument which relies on the exemption, notifies the regulatory authority (in the Netherlands, this is Dutch Central Bank) when the total value of payment transactions executed over the preceding 12 months exceeds the amount of EUR 1 million. According to Guideline 6, for the calculation of the EUR 1 million threshold, the calculation should be made at the level of the issuer. This is relevant where the issuer issues more than one specific payment instrument, as a consequence of which all payment transactions executed in the respective member State should be combined. Further, Guideline 6 describes the specific information requirements which should be met.

Next steps

The Guidelines will be applicable as of 1 June 2022. The Guidelines include a transitional period of 3 months for issuers that already benefit from the limited network exclusion and have notified Dutch Central Bank in this respect. Issuers of payment instruments that rely on the limited network exemption or intend to do so, would need to (re)consider whether they can still make use of this exemption following the entry into force of the Guidelines. In addition, issuers would need to assess whether they would need to notify the relevant regulatory authority or authorities when operating in multiple Member State, due to any changes in the notification requirement which may follow.


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