Winter
Icy temperatures, arctic winds and snow showers might disrupt many tube and train lines in Greater London - forcing thousands of commuters to find alternative transport or walk for miles through icy winds - it sure delivers some picturesque pictures and marvelous scenes. All around northern Europe temperatures have gone down and snow showers have been reported. This picture, taken by two unnamed students, is a scene in Finland. Winter has arrived early this year.

Future of the cheque in the UK

MPs: keep the cheque in the UK after 2018

A group of UK Members of Parliament (MPs), headed by Liberal Democrat MP David Ward, has launched a campaign to ‘save’ the cheque.

On 2 November, Ward introduced a Bill that would bring cheques under the consumer protection scope of the Financial Services Authority (FSA) and urged banks to re-think the proposals to abandon the cheque in 2018, introduced by the UK Payments Council (PC) in December 2009.

“[Abolishing the cheque] is a stitch-up by the banking industry, who have shirked every opportunity to modernise the system, and will be the main winners from its abolition”, Ward said on his website. “It is disgusting that a group with such vested interests in getting rid of cheques should be entrusted with this decision.”  

Ward, and a number of other MPs from different parties, have claimed that eliminating the cheque will have a major impact on small businesses and it could hit the elderly as well as visually impaired people.

Ward’s Bill will be discussed in Parliament in June 2011. In December 2009, the PC and its members voted to stop clearing cheques by 31 October 2018.

Published previously in E-Finance & Payments Law & Policy Magazine, November 2010. Copyrights apply

Pilot plan to harmonise payment infrastructure in Southern Africa

The Central Banks of 15 states in southern Africa will complete a pilot project to harmonise the payment infrastructures of the four countries with the ‘Rand’ currency within two years.

The Southern African Development Community (SADC) - an intergovernmental organisation which aims to improve economic integration - is built on the Single European Payments Area (SEPA) model, as Tim Masela, of the South African (SA) Reserve Bank, said on 25 October: “There is a common currency target for the region of 2018 and we want to make sure that any new infrastructure can support it. The experience in Europe is very useful”.

The pilot comprises of two phases. Firstly, the Central Banks of SA, Namibia, Swaziland and Lesotho will harmonise existing bank and payment systems. In the second phase, integration will be expanded to Congo and Zimbabwe.

“It’s an important move and very good for SA”, said Simon Cavill, Director of Strategy at Mi-Pay. “The first phase will be easy to implement as the countries have historically been close toSA, but it will be challenging to align countries with radically different political and economic structures.”

Not everyone thinks SEPA should be an example. “Let’s hope that SA keeps this as a business-led project and does not get tied up with politics and red tape like in the EU”, said Gary Wright, of BISS Research.

Cavill remarks: “I can see the value for SA, as the commercial powerhouse of the region, but what's in it for the smaller countries?”

Published previously in E-Finance & Payments Law & Policy, Michiel Willems 2010. Copyrights apply

UK: No harmonization of consumer protection at EU level

The UK has indicated it will oppose a strict harmonization of consumer protection legislation in Member States, the Department for Business, Innovation and Skills (BIS) said on 19 October.

"Minimum harmonization...would enable Member States to apply their own rules. The UK would be free to regulate this matter internally in domestic law", the BIS said in the 'Negotiating Line for the Consumer Rights Directive' Report.

The Response Report - the outcome of a consultation launched in July - makes clear the UK is not in favor of a stringent Consumer Rights Directive, which is currently being negotiated and will replace four existing Directives.

“The current EU legislative patchwork on consumer protection is overly complex and has its flaws", said Rohan Massey, Partner at McDermott, Will & Emery. "But in trying to harmonize, the EU runs the risk of removing protection currently given to consumers in certain jurisdictions. This is one of the UK's key concerns, which currently has one of the more robust regimes."

Jill Johnstone, of Consumer Focus, said: "UK consumers risk losing out if maximum, not minimum harmonization is adopted".

The European Commission (EC) believes strict harmonized legislation is necessary to increase cross-border online retail - last year, less than 2% of the total European retail trade. In August, when the EC launched a consultation about the future of e-commerce in the EU, it said 'a lack of confidence was holding back the development of the e-commerce market'.

“To increase cross-border trade in e-commerce, there needs to be greater standardization of legislation", agrees Massey. "But any attempt by the EU that results in a reduction of mandatory consumer protection will be met with strong political resistance locally."

Ben Allgrove, Partner at Baker & McKenzie, thinks the UK should not go its own way: "For online businesses, national regulation is actually a barrier. You need to consider and comply with 27 Member States' consumer protection regimes, which is costly to do".

Stephen Groom, of Osborne Clarke, believes enforcement should be on top of the agenda. "Enforcement is virtually ignored. There are still enormous disparities across the EU in how laws are policed and enforced." Groom continues: "How about a halt on any new laws at UK and EU levels until enforcement of existing consumer protection laws is given proper attention?"

Published previously in E-Commerce Law & Policy Magazine, London. Michiel Willems 2010. Copyrights apply.