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Payments & FinTech Lawyer

Volume: 11 Issue: 2
(February 2017)


Bank of England Governor Mark Carney warned of the potential for FinTech innovations to pose “systemic” risks to the financial system in a speech to a G20 event in Germany on 25 January 2017, describing how, while FinTech promises benefits, its transformative nature means it could threaten credit quality and pose risks to the wider economy. / read more

The UK’s HM Treasury (‘HMT’) published Draft Regulations alongside a Consultation on 2 February 2017 on the implementation of the PSD2, with the Draft Regulations to replace the Payment Services Regulations 2009; while much of the implementation will follow a ‘copy-out’ approach, HMT’s proposed approach to derogations within the PSD2 is noteworthy.  / read more

The UK’s Competition and Markets Authority (‘CMA’) issued on 2 February 2017 its Retail Banking Market Investigation Order 2017, which sets out how its recommendations should be implemented including those relating to Open Banking. The Order states that the new open banking standards must be developed by the UK’s nine largest banks by 13 January 2018. / read more


Much remains uncertain when it comes to Brexit, including in regards to the UK’s final deal with the EU and passporting rights for UK payment institutions - and for those firms in remaining EU Member States passporting into the UK. It could be that the agreement struck will mean that the continuation of passporting is secured; here, Paul Graham and Nicholas Thompsell of Fieldfisher LLP discuss what Plan B might look like if the UK fails to secure a post-Brexit deal that would allow UK-based firms continued access to the European Single Market. / read more

The EU’s Second Payment Directive (‘PSD2’) must be implemented by Member States by 13 January 2018, and Member States are now in the process of detailing how this landmark piece of legislation will be implemented in their respective jurisdictions. Two draft bills have been published that provide insight into how Germany will implement the PSD2; the draft bills discuss aspects such as commercial agent exemptions, surcharging and data protection, as Dr Nils Rauer and Andreas Doser of Hogan Lovells explain. / read more

In 2009 the Reserve Bank of India (‘RBI’) put into place a requirement for banks to implement an ‘additional factor of authentication’ (‘AFA’) based on information that is not visible on the credit/debit cards used in card not present (‘CNP’) transactions; typically this is delivered to consumers via internet passwords, for instance. Now the AFA Rule is set to be relaxed, with the RBI notifying the industry on 6 December 2016 that transactions of a certain value can be made without following the AFA Rule. Aaron Kamath and Vaibhav Parikh of Nishith Desai Associates discuss the background to the RBI’s latest move and how it fits into the wider push by the Indian Government towards the use of digital payments in the country. / read more

The Central Bank of the Russian Federation is keen to ensure the information security of Russian financial organisations, and to this end has established a number of mandatory regulations and standards in this area, the latter of which banks are able to adopt at their discretion. However, aside from other incentives, the Russian authorities have made it known that financial organisations following these guidelines are currently considered as compliant with Russian regulations on personal data protection. Anton Braginets of Dentons reviews these standards and the benefits for financial organisations in following them. / read more

Throughout January 2017, the UK’s Payment Systems Regulator (‘PSR’) has been consulting on proposals for remedying its concerns over the provision of central infrastructure services (‘CIS’) to Bacs, Faster Payments Service (‘FPS’) and LINK (‘the Remedies Proposals’). It set out those concerns in its market study, the final report of which it published in July 2016, concluding that there is no effective competition for the provision of CIS (‘the Final Report’). In a related investigation, at the end of January 2017, the Competition and Markets Authority (‘CMA’) published its Phase 1 decision on the proposed acquisition, by MasterCard, of VocaLink. It has also announced that, subject to consultation, it proposes to accept a package of undertakings offered by the parties, to remedy the competition concerns which it identified in respect of CIS for LINK. As a merger control decision, the CMA’s analysis provides an interesting alternative view on many of the same issues, from a different regulatory perspective, as Al Mangan, Managing Associate at Addleshaw Goddard, explains. / read more

In-app commerce is one of the fastest growing FinTech sectors as brands seek simple, frictionless and safe payment solutions for customers using mobile devices. Regulation will play a significant role in the rate of adoption, as we must - as an industry - ensure that mobile payments stay as seamless as they are safe. Yet as we begin a new year, it’s worth looking at the wider trends we’re seeing in this space, why they matter, and what payments people need to know in 2017. Dennis Jones, CEO of in-app payments provider Judopay, shares his experiences at Judopay in its attempt to make payments a frictionless part of the customer journey, how Judopay are innovating the market, and the need for regulation to be an enabler. / read more

About Payments & FinTech Lawyer

The monthly publication covering legal, regulatory and policy developments relating to the fast-moving payments and FinTech sectors. Key topics include mobile payments, e-money, prepaid and other payment cards, online banking, digital currencies such as Bitcoin, card fraud and other cyber crime, RegTech, robo-advice, P2P lending, and crowdfunding, as well as regulatory regimes such as the Second Payment Services Directive (PSD2), the Payment Accounts Directive, and the Fourth Anti-Money Laundering Directive / read more

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