"I want to speak today about what these changes look like and how they might develop...And I want to lay out how EU rules and regulations could respond to those changes."
This year, the European Payment Institutions Federation is marking
ten years representing much of the EU non-bank payment industry. I would
like to congratulate you on this important milestone.
As you know, the first Payment Services Directive dates back to 2007,
and it was a key milestone in reforming our laws for retail payments.
And EPIF was founded in response to this directive.
Since then, Europe has developed a diverse and competitive payments market.
The world of payments is changing rapidly.
Digitalisation and innovation have accelerated.
New players are entering the payments space and the market is changing.
Consumer expectations are changing, too.
I want to speak today about what these changes look like and how they might develop.
And I want to lay out how EU rules and regulations could respond to those changes.
[The world of payments]
First, I want to give an overview of the rapidly changing world of payments and the rules we have in place.
New technology has made payment services more diverse, convenient and secure.
Chip-and-pin technology for cards already seems almost antiquated as
we have become used to contactless payments, QR codes, mobile and
digital wallets, and secure online payments.
There are new players offering new services.
Over the past decade, non-banks have entered the payments market,
offering services directly to consumers without the need for a bank
licence.
These institutions have made a big contribution to shaping the
payments market in the European Union, creating a competitive and
innovative ecosystem.
Of the top ten European unicorns, four are financial services companies, and two of those specialise in payments.
More recently, new types of companies have entered the EU payments market.
Some, like processing companies or payment gateways, are not in
direct contact with consumers. Others, including big tech companies and
social networks, are using their vast customer base to gain a firm
foothold in payments.
The traditional lines between market players are becoming blurred.
Partnerships and acquisitions have changed the competitive landscape.
Card service providers are exploring open banking and instant payments.
Fintechs are working with banks to provide new services.
More competition is not a bad thing, but it does create new
challenges. We need to make sure we address possible risks, protect
consumers and maintain a level-playing field.
It’s not just the market that’s changing, consumer behaviour is changing too.
Consumers want to be able to shop and pay anywhere, any time, safely
and at low cost. They want to send money internationally as easily as at
home.
The pandemic accelerated this trend. During lockdowns, e-commerce
exploded, contactless payments reached an all-time high, and payments
via apps and mobile phones increased.
The European Central Bank noted that in the euro area, 40 percent of
consumers during the pandemic used less cash and made more contactless
payments.
That said, cash remains dominant in terms of the volume and value of total transactions.
Keeping cash both accessible and acceptable is vital for financial inclusion.
At the moment, the main piece of legislation we have for payments in
the single market is the Revised Payment Services Directive, adopted in
2015.
It enabled fintechs to access payment account data held by banks in a secure and -regulated way.
It has provided a solid foundation for open banking in Europe and new types of payment services.
But we need to make sure that our rules are ready for the challenges that come with change.
We want to provide industry with the clarity they need to innovate, while protecting consumers against risks....
much more at European Commission
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