It’s Only A Matter of Time: EU Mobile Payments Regulation

New mobile payment laws — particularly surrounding security measures — are likely to be proposed by the European Commission, reported Thursday (Nov. 13), citing an official at the UK’s Financial Conduct Authority.

That indication stemmed from a Global Payments Conference in London recently where Nilixa Devlukia, technical specialist for payments in the policy, risk and research team at the FCA, told delegates that “new legal framework would be separate from the ongoing moves to reform the Payment Services Directive.”  The terms of that directive are anticipated to be finalized in the spring in 2015, following discussions from the European Parliament and Council of Ministers. This would also impact discussions on new mobile payment laws, the report said, though that may be looked at as an additional set of regulations.

“There will be an overhaul of the existing third party payment provider model that currently operates in the payments market,” the article summarized Devlukia saying. “The third party providers will not be able to get as ready access to ‘consumer bank credentials to facilitate transfers’ under the new regime.”

The Payment Services Directive reform is still in negotiations and no final wording has been decided, but Devlukia did say that there will be an attempt to narrow exemptions allowed under the current laws. Devlukia said that the European Commission has shown concern about consumer protection issues and ensuring no mobile payment practices were being abused because of exemptions.

“One exemption applies to services based on instruments that can be used to acquire goods or services only in the premises used by the issuer or under a commercial agreement with the issuer either within a limited network of service providers or for a limited range of goods or services,” the article said.

Devlukia also pointed to new European Union regulations about network and information security, data protection, wire transfers, anti-money laundering, interchange fees. The article also cited thoughts from PayPal director Tom Brown, head of legal for the company in the UK and Ireland, who said he had concerns about the “risk of conflicting messages being communicated on the issue of the security of payments.”

According to the article, Brown stressed for “technology-neutral” solutions and said he would advocate for a new Consumer Payments Directive at the European Union to ensure information, security and payment innovation are being weighted equally under one single law. What he was referencing, according to the article, was “moves to build two-factor authentication into payment processing, separate rules on internet payment security issued by the EBA, and other guidelines on mobile payment security issued by the European Central Bank among other examples of initiatives in this area.”

“The measures need to match,” Brown said in the article. “There needs to be consistency from a provider perspective.”


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