30 January 2015

EPC Newsletter: The future of payments

The latest edition of the EPC Newsletter, published quarterly by the European Payments Council (EPC), takes a closer look at developments expected to shape the future of European payments in 2015 and beyond.

Javier Santamaría reports on preliminary conclusions reached at the session ‘payments – improving users’ experience and looking into the future’ hosted by the European Commission at its conference on emerging challenges in retail finance and consumer policy which took place on 18 November 2014. Santamaría points out: “The speed at which developments evolve and their impact on society, at multiple levels, pose new challenges to building future scenarios that may claim to provide at least an approximation to new emerging realities.”

“The probability that a new solution – which could render mid to long-term predictions obsolete – is just around the corner, should be factored into the scenario building exercise,” he adds.

To illustrate the point: in December 2014, the European Banking Authority (EBA) published its finalised guidelines on the security of internet payments that payment service providers in the European Union (EU) will be expected to implement by 1 August 2015. The guidelines are based on recommendations first issued by the European Forum on the Security of Retail Payments (SecuRe Pay) in January 2013.

Examining the EBA guidelines, Etienne Goosse comments: “In the last two decades many security solutions were implemented, only to have been rendered obsolete as technology evolves.” For example, since the issuance of the Secure Pay recommendations on the security of internet payments in 2013, “tokenisation has been picked up as one of the prevalent security solutions in any future e-payments system but, understandably, at the time of publication, the recommendations did not take tokenisation into much consideration.” The EPC therefore, suggested that new developments would be taken into account when finalising the EBA guidelines as otherwise “innovation in this area could be seriously hindered.”

With regard to scenario building in the digital age, Santamaría concludes: “Thinking outside the box is a valuable exercise. Keeping in mind established wisdom doesn’t hurt either. Regulation – now and in the future – should strive to achieve legal certainty, balance, technology neutrality and a level playing field amongst all players.”

This EPC Newsletter also covers the following topics, among others:

• The European Commission, the European Parliament and EU Member States are now in the process of negotiating the final version of the forthcoming revised Payment Services Directive (PSD2). EPC’scommentators identify the principal requirements that PSD2 will have to meet to achieve its stated objective, namely, to promote a secure, competitive and innovative EU payments landscape
• EPC reports on next steps agreed by the Euro Retail Payments Board (ERPB) to address any remaining SEPA Credit Transfer and SEPA Direct Debit post-migration issues, pan-European electronic mandate solutions, and mobile and instant payments. The ERPB is a multi-stakeholder body created and chaired by the European Central Bank
• Guest contributor Edith Rigler analyses latest developments in the virtual currencies landscape and the emerging regulatory response

Full newsletter

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