EU Lawmakers Propose Tighter Regulations for Mobile Wallets (Sept. 29, 2014)
The Presidency of the Council of Ministers, the European Union law-making body, has recommended tightening regulations regarding customer authentication and protection of sensitive payment data related to mobile wallets, according to its recently released proposal of the revised Payment Services Directive (PSD2). The proposal attempts to “catch the many different types of payment services carried on today and those that may appear tomorrow,” according to Siobhan Moore, senior associate at Locke Lord.
The expanded PSD2 includes services that are based on access to payment accounts provided by payment service providers (PSPs) that, for example, provide payment initiation or account information services, but are not the account servicing PSP—such as a bank or other entity providing customers with a payment account. Providers of mobile payment applications offering those services would be subject to the same regulatory environment as existing PSPs, Moore says.
“On the one hand, that means we move toward a consistent legal landscape that can be applied to all payment service operators, regardless of the nature of the service provided, and a consistent level of consumer protection,” she tells Paybefore. “On the other hand, it may mean that the cost in getting a license to operate the business and meeting the regulatory requirements may well be passed on to the [consumer], and would the [consumer] be prepared to pay that price?”
This draft of PSD2 must now be approved by Parliament and the Council of the European Union. If approved, PSD2 must become national law within two years of its adoption. So if the text is approved and adopted before the end of this year, it becomes national law by 2016.
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