The Payment Accounts Directive is a European Union rule that gives you the right to a basic bank account and protection when you pay for things online or by card

The Payment Accounts Directive (PAD) is an EU law that sets minimum standards for bank accounts and payment services. It does two main things: it requires banks to offer you a basic payment account even if you have been refused elsewhere, and it sets rules for how banks handle your money when you make online purchases or card payments.

If you live in an EU country or the UK, this law affects the account you hold and the protections that come with it. You do not need to do anything to get these protections — they apply automatically to most personal bank accounts. But understanding what the Directive covers helps you know what your bank must do and what you can push back on if they refuse.

Key Takeaways

  • Banks must offer you a basic payment account with a debit card and online access, even if you have been refused a standard account elsewhere.
  • The Directive protects you when you authorise a payment — your bank must refund unauthorised transactions within a set timeframe.
  • If a payment goes wrong (the seller does not deliver, or charges you twice), you have the right to dispute it with your bank.
  • Banks can charge reasonable fees for a basic account, but cannot refuse you one based on your credit history or past banking problems alone.
  • The rules apply in all EU countries and the UK, so the protections follow you if you move or open an account abroad.

Who has the right to a basic payment account

Any adult living in an EU country or the UK can demand a basic payment account from a bank. You do not need a job, a good credit score, or a history of banking elsewhere. Banks cannot turn you down because you have been refused credit, have debt, or have had problems with a previous account.

The only grounds a bank can use to refuse you are: you already have a basic account at that bank, you are opening the account for a business rather than personal use, or you are trying to open multiple accounts at the same time to get around the rules. If a bank refuses you, they must give you a written reason and tell you how to complain to the financial regulator in your country.

A basic account is not the same as a premium account with investment features or rewards. It is a simple account designed to let you receive wages, pay bills, and make everyday purchases. It must come with a debit card and online or mobile access so you can check your balance and move money.

What happens when you authorise a payment and it goes wrong

When you tap your card, enter your PIN, or click "pay now" on a website, you are authorising a payment. The Directive says your bank must refund you if someone else uses your card or account details without your permission. You have up to 13 months to report the fraud, though reporting it quickly (within days) makes the process faster.

Your bank must refund the full amount unless they can prove you acted fraudulently or with gross negligence — for example, you wrote your PIN on the card itself or shared your login details with someone else. If the bank is slow to refund you or refuses without good reason, you can complain to your national financial ombudsman or regulator.

If you authorised the payment but the seller did not deliver the goods or charged you twice, that is a different problem. You still have the right to dispute it, but the bank's job is to investigate and pass the information to the seller's bank. The seller bears the cost if they cannot prove they delivered what you paid for.

Fees and charges your bank can impose

Banks can charge you for a basic account, but the fees must be reasonable and transparent. There is no fixed cap set by the Directive itself — what counts as reasonable depends on the country and the bank. However, the fee cannot be so high that it defeats the purpose of giving everyone access to banking.

Banks must tell you the fees upfront, in writing, before you open the account. They cannot hide charges in the small print or add surprise fees later without your consent. If you think a fee is unreasonable, you can complain to your bank and then to the regulator if the bank refuses to budge.

Some countries offer free basic accounts, while others allow banks to charge a small monthly or annual fee. Check with your bank or your country's financial regulator to understand what is standard in your area.

How the Directive protects you when you dispute a transaction

If you spot a transaction you did not make or do not recognise, you have the right to ask your bank to investigate. You do not have to prove it was fraud — you just have to report it. Your bank must then contact the seller's bank and ask them to prove the transaction was authorised by you.

While the investigation is happening, your bank must refund you the money unless they have strong evidence you authorised the payment or acted negligently. The investigation usually takes 10 to 20 working days. If the seller's bank cannot prove you authorised it, the money stays with you.

If your bank refuses to investigate or takes too long, you can escalate the complaint to your national financial ombudsman. They can order the bank to refund you and pay compensation if the bank broke the rules.

What the Directive does not cover

The Directive does not set rules for overdrafts, savings accounts, or investment products. It does not cap interest rates or set minimum interest on deposits. It does not force banks to lend you money or offer you credit.

It also does not cover cash withdrawals or transfers between your own accounts — only payments to third parties. And it does not protect you if you voluntarily give your card or PIN to someone else, even if you later regret it.

If you have a complaint about something outside the scope of the Directive — such as a mortgage rate or a savings account — you still have the right to complain to your bank and then to the regulator, but the Directive's specific protections do not apply.

How to complain if your bank breaks the rules

Start by contacting your bank in writing. Describe what went wrong, what you asked the bank to do, and what you want as a result (usually a refund or correction). Keep copies of all emails and letters. Your bank must respond within a set timeframe — usually 15 working days for an initial response and up to 35 days for a full answer.

If the bank refuses or does not respond, contact your national financial ombudsman or regulator. In the UK, that is the Financial Ombudsman Service. In EU countries, each country has its own ombudsman. You do not need a lawyer, and there is no cost to you. The ombudsman can order the bank to refund you and pay compensation if they find the bank broke the rules.

Keep records of everything: your account statements, the disputed transactions, copies of your complaint letters, and the bank's responses. These documents are your evidence if the case goes to the ombudsman.

Frequently Asked Questions

Can a bank charge me for opening a basic account?

Yes, but only a reasonable fee. The bank must tell you the cost upfront before you open the account. If you think the fee is too high, you can complain to your bank and then to the financial regulator in your country. Some countries have free basic accounts; others allow small monthly fees.

What if I report fraud after three months?

You can still report it — you have up to 13 months. However, the longer you wait, the harder it is for the bank to investigate and the more likely they will ask you why you did not notice sooner. Report fraud as soon as you spot it to make the refund faster and easier.

Do I lose my protections if I move to a different country?

The Directive applies in all EU countries and the UK, so the same protections follow you. If you open a new account in another EU country or the UK, that bank must also offer you a basic account and the same fraud protections. However, the specific rules and complaint procedures may differ slightly by country.

What if the seller's bank says I authorised the payment?

Your bank must investigate further. If the seller cannot prove you actually authorised it — for example, with a record of your PIN or a signed receipt — your bank should refund you. If they refuse, escalate the complaint to the financial ombudsman, who can order the refund.

Does the Directive protect me if I give my card details to a scammer?

No, not if you voluntarily gave them the details. The Directive protects you from fraud — someone using your card without permission. If you knowingly gave your details to someone and they misused them, that is not fraud under the Directive, though you can still complain to your bank and the regulator.