Monday, 13 February 2012

Europe pushes for integration of card, online and m-payments

The European Commission (EC) has published its long-awaited Green Paper on how the European Union (EU) should overcome difficulties in creating an integrated market for card, internet and mobile payments.

"The Green Paper demonstrates that in 2012 the integration of the Euro payments market will enter a new and decisive phase", said Gerard Hartsink, Chairman of the European Payments Council. 

The EC expects that an integrated market will benefit consumers, merchants and providers since "such a market would result in increased competition, greater transparency, more innovation and better security", said Ben Regnard-Weinrabe, a Partner at Hogan Lovells, who welcomed the document. Internal Market and Services Commissioner Michel Barnier said legislative changes are needed since "we will not be able to reach this goal with the current level of market fragmentation".

With the Green Paper, the EC aims to create 'a payments market through electronic and mobile payments'. But John Worthy, Partner at Field Fisher Waterhouse, wonders what the value of this statement is: "The level of attention in the Green Paper to existing card based payments leaves open the question how far the Commission is giving equal weight to electronic and mobile payments". Hartsink also warned that "promoting EU integration is not for the faint hearted and requires focus on the long-term objectives".

The main issues the Green Paper addresses are market access (for existing and new payment providers), security and data protection concerns, interoperability issues and transparency of payment service prices.

A number of big players
"A key challenge is how to involve a wide community of stakeholders in the formulation of policy, and in standardisation initiatives, without creating paralysis", said Regnard-Weinrabe. "The holy grail is to achieve access to different systems, and interoperability between them, so that it becomes quicker and cheaper to push money around Europe. We can expect a degree of resistance from card schemes."

Worthy also thinks full market integration will be a challenge since "many existing and aspiring players in e-payments and m-payments markets come from different ecosystems from traditional payments providers".

Michiel Willems © 2012 CP Publishing Ltd. London, UK. Pictures EU /