Payment Matters 16: Europe and beyond

• United Kingdom

• Financial services - Payment services

20-04-2015

In this issue:

• European Parliament adopts MIF Regulation on interchange fees for card-based payment transactions
• ECB publishes guide for assessment of card payment schemes against Eurosystem's oversight standards
• Commission Staff Working Document on the movement of capital and the freedom of payments
• Implementation monitoring of the PFMI
• Internet card fraudster jailed

European Parliament adopts Regulation on interchange fees for card-based payment transactions

On 10 March 2015 the European Parliament announced that that it had adopted the proposed MIF Regulation on interchange fees for card-based payment transactions (the MIF Regulation).

The MIF Regulation, which largely follows a Commission proposal from July 2013, will cap the fees that banks charge retailers to process shoppers’ payments. The adopted text has not yet been made publicly available, and now needs to be formally adopted by the Council. The press release states that the MIF Regulation should apply six months after its entry into force.

What this means for you

The Regulation will give more freedom of choice to retailers between cards charging different fees, enhance transparency for card transactions, and pave the way for innovative payment technologies to be rolled out. The benefit should be felt by customers too, provided retailers pass on the savings to them. Read further comments by our specialists on the MIF Regulation.

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ECB publishes guide for assessment of card payment schemes against Eurosystem's oversight standards

On 25 February 2015 the European Central Bank published a guide outlining the general requirements that overseen card payment schemes (CPS) should follow to provide the business and statistical information needed to comply with the Eurosystem's oversight standards.

What this means for you

The guide is intended for both the card payment schemes' governing authorities responsible for ensuring compliance, and for the overseers conducting the oversight of both national and international CPS based on the standards. It will be important for card payment scheme providers to think about the specific function that an individual entity at a different level assumes, as each entity could be jointly accountable for the overall functioning of the CPS, for promoting the payment instrument, for ensuring compliance with the scheme’s rules and for setting clearly defined, transparent, complete and documented boundaries for their responsibilities within this scheme. These entities must then jointly ensure that all relevant standards of the oversight framework are met.

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Commission Staff Working Document on the movement of capital and the freedom of payments

On 5 March 2015 the Commission posted a working document on freedom of movement relating to payments. In the light of the importance of achieving a Single Market for capital, the document describes the trends in EU capital movements in 2013 (and 2014, where data is available). It gives an overview of the legal framework for the freedom of capital movements and payments. The document also reports on recent developments in relation to monitoring and enforcing the relevant rules.

What this means for you

Section 5 of the working document sets out the new rules on payment services for a better integrated EU retail payment market and notes the significant progress that has been achieved through harmonisation at EU level. It provides readers with a useful update on the progress in the Single Euro Payments Area (SEPA), PSD2 and the MIF Regulation.

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Implementation monitoring of the PFMI

On 26 February 2015 the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions published three reports on selected jurisdictions' progress towards the implementation of the Principles for Financial Market Infrastructures.

• European Union
• Japan
• United States

What this means for you

The principles apply to all systemically important payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories. The standards are designed to ensure that the infrastructure supporting global financial markets is robust enough to withstand financial shocks, and contain new and more demanding international standards for payment, clearing and settlement systems.

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In other news…

Internet card fraudster jailed

A fraudster was jailed for 3 years and 7 months and ordered to pay over £11,000 after he used stolen bank card data bought from a card fraud website. The compromised cards originated from the UK, along with Australia, China, Singapore and Canada. The card ‘dump site’ Mattfeuter, based in Vietnam, has since been broken up following an international police operation. The investigation was carried out by the Dedicated Card and Payment Crime Unit (DCPU), a police unit sponsored by the banking industry and made up of bank investigators, support staff from FFA UK and officers from the City of London Police and the Metropolitan Police Service. It found that 56 of the cards had been used to make fraudulent transactions worth £11,180.

Detective Constable Aine Matthews, who led the investigation for the DCPCU, said: “Akpabio tried to use the anonymity of the internet for his fraudulent purposes. Today’s sentence is a clear warning to others considering a similar path that you cannot hide behind a computer screen – you will be caught and punished.”

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