The European Commission has implemented changes to the regulations governing the electronic payments industry, including measures to combat fraud by allowing payment service providers to exchange information. This development occurs during a period of expansion within the fintech ecosystem.
The new bundle of reforms is being introduced during a period of market transformation. According to data from the Commission, electronic payments in the EU soared to €240 trillion in 2021, a substantial increase from €184 trillion in 2017. The surge in figures can be attributed in part to the impact of the Covid-19 pandemic.
According to a statement from the Commission, the reforms encompass the revised Payment Services Directive, which introduces measures to tackle and mitigate payment fraud and enhance refund rights for consumers who are targeted by fraudulent activities.
The commission is additionally considering granting non-bank payment service providers full access to all payment systems within the EU. This approach aims to establish equal opportunities for both banks and non-banks by implementing a new set of regulations. Furthermore, this measure is anticipated to offer adequate protections for non-bank providers and ensure their entitlement to a bank account.
Among the comprehensive reforms introduced by the commission in the realm of electronic payments, there are also improvements being made to open banking. This entails establishing a secure method for consumers and businesses to share their payment account information with regulated third-party entities, enabling them to access tailored services like lending or payments.
The proposal includes the ability for customers to share their data with data users with no obligation to do so, financial institutions who hold customer data will be obligated to make this data available to data users, customers will have full control over who accesses their data and for what purpose. Furthermore, there will be clear standards of customer data and the required technical interfaces, as well as liability regimes for data breaches and dispute resolution mechanisms.
