The European Commission published the Green Paper on an integrated European market for card, internet and mobile payments (January 2012) which was followed by a public consultation. In the Single Market Act II (October 2012), the Commission announced legislative actions as a follow-up to the Green Paper i.e. revision of the Payment Services Directive (directive 2007/64/EC) and legislative initiative on multilateral interchange fees. The proposals were published in July 2013. Legislative process is on-going.
What is the problem?
EU payment market suffers from a number of drawbacks. The costs of acceptance of cards, as the most common payment instrument online are high, payments markets are still fragmented, in some cases the industry has not yet agreed on a set of technical standards for the whole of the EU. The markets are not as dynamic and innovative as they should. There are many new technologies, such as using electronic wallets or smartphone at the point of sale. However – except in a few EU countries – it is difficult for these services to enter cross-border market for payments.
Why is EU action required?
The traditional approach to the payments, which combined regulation, self-regulation and competition enforcement, has brought concrete results. At the core lies the Single Euro Payments Area, a project run by the banking sector. The body in charge of SEPA – the European Payments Council – has achieved a lot since it was set up in 2002, but after ten years the project needs to be reinvigorated (see Action 7).
The Commission needs to update the current legal framework in the area of payments to reflect market developments, ensure level playing field for innovative payment service providers as well as consumer's convenience and security. Standardisation and interoperability issues need to addressed by appropriate fora.
What has the Commission done so far?
The Commission's work on payments has been pursued with the Green Paper on an integrated European market for card, internet and mobile payments, which opened a public consultation. The Commission enquired stakeholders on a number of issues related to: innovative payment service providers, costs of payments for consumers and merchants, standardisation and interoperability.
On 24th July 2013, the Commission published the following legislative proposals:
What will the Commission do next?
The Commission will assist the European Parliament and the Council during the legislative process of the above proposals.