On 4th and 5th of July, I attended the European Payments Regulation event as guest speaker, both on behalf of Payvision and the European Payment Institutions Federation (aka EPIF). During the Strategy Roundtable I took part in (together with Dag-Inge Flatraaker – Head of Group Payments Infrastructure and Strategy, DNB BANK, Alain Hiltgen – Executive Director, UBS AG, Ricardo Varela – Head of BlueVia, TELEFONICA, and Piet Mallekoote – Chief Executive, IDEAL) we discussed the most relevant security challenges and opportunities of e-payments and m-payments.
I foresee that providers will face some competition issues, raised by certain security rules issued on a pan-European basis, which might lead, especially, to:
- The absence of a level playing field, which will impact smaller players in particular, if a risk-based approach is not properly applied, not only in the wording of the regulations but also in the way these are applied and enforced.
- And on top of that, it might imply a competitive disadvantage for European e-payments and m-payments players as compared to non-European ones, because companies might fly out of the European Union in search of regions with less stringent requirements.
For tackling those two competition hurdles the following would be necessary:
- First, the industry in general needs to foster co-operation between European and non-European authorities, as ideally the regulations should point to a global approach rather than a European one.
- Second, authorities should ideally design a framework that sticks to a risk-based approach, for it to reach a balance between safety and competition (so that the requirements are softened for those players that pose less or no risk to the Payment System). In my opinion it is clear we are facing a new landscape, full of opportunities as well as risks. And also that in this new stage there are more participants than there used to be. However, the fact that banks and established players have to adapt to the new situation does not imply that they will lose. On the contrary, I reckon that this will be highly beneficial for their medium and long-term results, as they have more resources than any other stakeholder to address this migration stage.
Ignacio discussed in another post the challenges & opportunities for the users of e-payments and m-payments from a customer perspective, as well as the complexity of the compliance framework faced while doing cross-border ecommerce.