E-Payments without frontiers

Transcription

1 E-Payments without frontiers Koenraad De Geest Deputy Director General Directorate General Payment Systems and Market Infrastructure Frankfurt am Main 10 November 2004

2 Presentation outline 1. E-payments definition and conference scope 2. Identifying challenges Results of a survey 3. The Eurosystem s approach and ECB activities

3 1. E-payments definition & scope payments that are initiated, processed and received electronically focusing on recent developments in retail payments e-commerce transactions (B2C) and e-payments between consumers (P2P) beyond traditional bank services

4 Diversity of options Data & digital goods providers IDTV Means of payment (deposits, e-money, others) Interactive TV Fixed analogue line SWIFT Service providers Sports, hobby, leisure CLS Desktop ISDN Shop Laptop Credit card processing Invoice & debit Debit card processing Working place Organizer Fixed high-speed line (xdsl) World Wide Web Netting Private consumer Home Home Mobile Phone WAP Pre-funded Gross settlement National ACH PE-ACH SMS, MMS Transport & travel Magnetic card & reader Smart card & reader Mobile networks (GSM, GPRS, UMTS) Real time Batch processing Pay later Gastronomy PKI certificate contactless chip RFID Other digital devices (flash, stick, cam, player, console ) Radio Frequency Wireless Local Area Network PEDD CREDEURO location & needs Username: ******* Password: **** 3D-Secure: ***** National Direct Debit National Credit Transfer PIN etc. Infrared (IrDA) Bluetooth access devices / initiation ATM Kiosk Government Biometric access communication networks clearing & settlement counterparts Retailers, merchants, outlets Other persons Banks/ financial services

5 E-Payments without frontiers? Conference topics Recent developments in the e-payments market in a pan-european context: getting domestic in SEPA? Their potential macroeconomic benefits and risks Challenges for a sustainable market development

6 2. Identifying the challenges A survey among providers "To what extent do the following factors hinder the development of the payment services you offer? (ECB survey of EU-25 e-payment providers*) Limited merchant interest Lack of standardisation Limited consumer interest Lack of interoperability between different schemes Underdeveloped legal/regulatory framework Security concerns on the part of consumers Too tight legal/regulatory framework Security concerns on the part of merchants Insufficiently developed technology * Survey conducted via epso, N=75 service providers Averages, standard deviations indicate a high degree of uncertainty Scale: 0 (very little) to 4 (very much)

7 E-payments innovation raises many questions Cost-benefit / risk distribution? Consumer protection? Level playing field for all EU countries? Addressing changes in transaction needs? Core Principles Compliance? Social exclusion? Privacy? Availability? Shadow economy? Reliability? Merchant interests? Substitution effects? Competition between different institution types? Efficiency? Lisbon Agenda? Redeemability? Converging e-payments culture? Terrorist financing? Externalities? Monetary order? Money Laundering? Trust in currency? Network effects?

8 3. The Eurosystem s approach and ECB activities To promote the smooth operation of payment systems to maintain stability to promote efficiency and security of payment infrastructures to safeguard the monetary policy transmission mechanism 2 roles as regards e-payments: catalyst and overseer

9 Activities from catalyst perspective i.e. improve and facilitate co-ordination, provide analysis and information Articles, issues papers, events, newsletter P+S-N Re-launch of the electronic Payment Systems Observatory (epso, in 2003 Offering online databases, discussion forum Work to improve statistics (beyond Blue Book), first results envisaged next year Facilitate the development and adoption of EU-wide standards for the whole payment cycle Single Euro Payments Area (SEPA) - observer in European Payments Council

10 Activities from oversight perspective i.e. looking at systems primarily from a safety, but also from an efficiency perspective: setting requirements, checking compliance with those requirements, and addressing threats and weaknesses that are identified Relevant aspects for e-payment-related services: generally accepted means of payment are issued by credit institutions ensuring the availability of cost-efficient and sound retail payment instruments in the euro area, for existing and emerging transaction needs In the e-payments field, focus initially on the catalyst function. The oversight function will gain importance once early development phase has passed.