EMA response to the EC Green Paper: ‘Towards an integrated European market for card, internet and mobile payments’.

In January, the European Commission started a stakeholder consultation on the future of the European payments market by issuing the Green Paper: ‘Towards an integrated European market for card, internet and mobile payments’. It sought responses to a series of questions with respect to card payments, interchange fees, SEPA, standardisation, interoperability and payments security.

The EMA response to the Green paper stresses that the EMA is not in favour of regulatory intervention with respect to interchange fees. Regarding possible access to the bank account by third party payment service providers, the EMA recognises that it would enable significant innovation by third party providers and the offering of added value services. Such use would of course be subject to the bank’s or payment provider’s security policies, IP rights, and risk and compliance requirements. Ultimately, of greatest concern will be the need to maintain the high level of security that users expect, and this will be a gating factor. It is therefore better to encourage rather than mandate such features.

As for further security requirements, the EMA has noted that technology and security are dynamic in nature, and do not benefit from regulatory intervention at the technical level. It would be better to provide for security that is ‘appropriate’ and ‘fit for the purpose’ for which it is deployed, rather than specify a particular technological or security solution. Furthermore, depending on the risk profile and needs of a given payment service, the degree of security that is appropriate will vary.

We have also stressed that the current SEPA governance arrangements at the EU level insufficiently cater for the representation of the e-money industry, despite its contribution as the most innovative part of the payment industry and one of its fastest growing sectors. Metrics that seek to allocate participation in governance and policy discussions on the basis of transaction volumes will always favour entrenched providers and will discriminate against new payment service providers. The EMA is of the opinion that the representation of innovative players needs to better reflect their contribution to the evolution of the sector rather than simply taking a retrospective outlook.

A summary and feedback statement on all the responses can be found on this EU Commission web-page, which also provides further information on the special conference that was held on the Green Paper (May 4, 2012). It can be expected that the input gathered from the discussions at the conference and the consultation may lead to a proposal for revision of the Payment Services Directive.