The European Union's banking watchdog has eased its proposed rules for increasing choice in how people pay for products and services after the sector warned of unfair competition. The European Banking Authority Chairman Andrea Enria said changes have been made to the watchdog's draft rules that flesh out the bloc's revised payments services law from January 2018 to prise open a core part of banking to newcomers.
EBA startled the industry last year by proposing that only payments of 10 euros ($10.54) or less would be exempt from mandatory "strong authentification", such as the customer tapping in a password or providing a fingerprint. Enria told a conference on Tuesday this limit would be increased to 30 euros.
Two new exemptions from "strong authentification" will also be introduced for retailers with a low-fraud record for payments, and for payments made at "unattended terminals" for transport or parking fares.
"However, we disagreed with a number of comments that suggested adding further exemptions, such as on corporate payments," Enria told a Westminster Business Forum conference.
He said the watchdog has also made changes to ensure "business model neutrality" after financial technology or "fintech" firms and others said they would have difficulty retrieving the data they need from a customer's bank account to offer a rival payment service.
"The banks will be obliged to provide both the provider and customers the same level of access," Enria said.
Consulting on what Enria called "major game-changing" rules sparked the biggest response from industry that EBA has ever seen, even surpassing reaction to the watchdog's curbs on banker bonuses.
A far wider range of companies will be able to offer apps that allow customers to make payments directly from their account to a retailer without having to use cards issued by banks.
Jeremy Light, managing director of payment services in Europe for Accenture, a consultancy, said retailers will use their reach and resources to offer more payment services.
"Consumers will have control of payments in their own hands, while merchants can by-pass the card networks to avoid paying fees to the card issuers," Light said.
"Tesco has already started this with PayQwiq, and in the United States, some of the most successful mobile payments are being driven by merchant apps, such as Starbucks."
The EBA is due to publish its "final" draft rules later this week and the bloc's executive European Commission will have to endorse the EBA rule before they come into force.
Comments
Comments are closed for this article.