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Payments & FinTech Lawyer

Volume: 11 Issue: 3
(March 2017)


Payments UK, the trade association for the UK payments industry, published its response to the European Banking Authority’s (‘EBA’) Consultation on the draft Guidelines on Major Incidents Reporting under the revised European Payments Services Directive (‘PSD2’) on 1 March 2017, in which Payments UK identifies concerns with the proposed requirements, including that the timescales for the submission of reports are “unrealistic and inconvenient” especially in the context of a major security incident and that early estimates in regards to the scale of incidents “offer little or no value and only seek to spread panic.” Payments UK puts forward possible solutions to the concerns identified and highlights instances in which they believe more clarity is needed. / read more

The European Banking Authority (‘EBA’) released on 16 February 2017 a consultation on its Draft Guidelines on procedures for complaints of alleged infringements of PSD2 (‘Draft Guidelines’), proposing that competent authorities (‘CAs’) should create a procedure allowing ‘aggregated analysis’ of complaints they receive about alleged infringements of PSD2. / read more

The US Securities and Exchange Commission (‘SEC’) rejected on 10 March 2017 an application by Tyler and Cameron Winklevoss for a Bitcoin exchange-traded fund (‘ETF’), which would have allowed investments in Bitcoin through the purchase of shares in the ETF on a US stock exchange, as opposed to investors holding bitcoin themselves. Some commentators view the decision as a set-back for Bitcoin, as it was hoped the ETF would lead to greater investment in Bitcoin. / read more


Following some controversy and plenty of industry reaction in regards to the initial draft, the European Banking Authority (‘EBA’) released a final draft of its Regulatory Technical Standards (‘RTS’) on Strong Customer Authentication (‘SCA’) and common and secure communication under Article 98 of Directive 2015/2366 on 23 February 2017. The EBA is required under the revised Payment Services Directive (‘PSD2’) to produce the SCA RTS, with PSPs mandated under PSD2 to apply the SCA, subject to certain exemptions. Kate Johnson and Paul Anning of Osborne Clarke analyse the new draft, what has changed and what has not, and explain why there may still be further delays to timescales around the SCA RTS. / read more

Ruth Evans, Chair of the UK’s Payments Strategy Forum - the organisation established by the Payment System Regulator (‘PSR’) to develop a strategy for payment systems in the UK - describes in this article the aims behind the creation of the Forum, the payment system issues observed to be causing detriment to end-users that the Forum seeks to address, and the Forum’s plans for a ‘New Payments Architecture’ to deliver solutions. / read more

At the end of last year, Indonesia’s Financial Service Authority (Otoritas Jasa Keuangan, or ‘OJK’), reacting to concerns about a lack of supervision in the digital lending market, released Regulation No. 77/POJK.01/2016 concerning Information Technology-Based Money Lending Services (‘OJK Lending Regulation’). This Regulation looks to provide further legal certainty for peer-to-peer (‘P2P’) lending in Indonesia, and represents one of a few steps that authorities in Indonesia have taken to better regulate and develop the FinTech space. Hanim Hamzah, Regional Managing Partner of ZICOlaw Network and Senior Foreign Counsel at Roosdiono & Partners, and Sianti Candra, Knowledge Management and Senior Associate at Roosdiono & Partners, review the OJK Lending Regulation, asking whether it represents a hurdle or a boost for P2P lending, as well as looking more generally at the current regulatory environment for FinTech in Indonesia. / read more

At the beginning of February this year, the UK’s HM Treasury released its Consultation on the Implementation of the revised EU Payment Services Directive (the ‘Consultation’); the Consultation ended on 16 March 2017 and HM Treasury is at the time of writing considering the feedback. Here, Arun Srivastava and Nina Moffatt of Baker & McKenzie LLP discuss in detail HM Treasury’s Consultation and the issues raised, and look at some industry concerns, such as whether the UK Government is seeking to perhaps unnecessarily ‘gold-plate’ certain requirements of PSD2. / read more

In Hungary, the country’s Competition Office has begun an investigation into the use of so-called ‘cash substitutes’ such as mobile payments and cards for the making of payments, with the main goal of such investigation appearing to be to explore the conditions applicable between traditional credit institutions and retailers. Dr Szabolcs Mestyán and John Fenemore of Lakatos, Köves and Partners discuss this investigation in the context of regulatory and policy developments surrounding payment infrastructure in Hungary, and analyse why the Hungarian Government is paying particular attention to the retail payments sector. / read more

Innovations in the open banking space could bring to consumers simpler and more efficient payment processing and other benefits, but such innovations need to be balanced against the need to ensure the security of payments. Jacqui Hatfield, Partner at Reed Smith, reviews recent initiatives in this area and the challenges facing open banking. / read more

The attention being given to the blockchain has included consideration of the potential for smart contracts - effectively containers of code and data that is stored on the blockchain that reflects and can execute an agreement made between parties. These smart contracts have a number of potential use cases in insurance, but there are some challenging legal questions ahead around their use, as Tim Roughton, Partner at Pinsent Masons, explains. / 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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