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Payments & FinTech Lawyer

Volume: 8 Issue: 1
(January 2014)


The European Parliament Committee on Economic and Monetary Affairs met on 17 December to discuss the draft report on the proposal for a regulation on interchange fees for card-based payment transactions prepared by rapporteur Bidegain, which looks to amend the draft legislation put forward by the European Commission. / read more

The European Commission (EC) proposed on 9 January that an extra transition period of six months be allowed for migration to the Single Euro Payments Area (SEPA), because of ‘serious difficulties’ non-compliant businesses will face when payments not in the SEPA format are blocked after the up-coming formal deadline of 1 February 2014. / read more

The Inland Revenue Authority of Singapore (IRAS) has provided guidance on Bitcoin in an email received by news site Coin Republic, finding the crypto currency subject to GST as a ‘supply of services.’ / read more


The European Commission’s proposed Regulation on interchange fees for card payments was followed in November and December by Draft Reports from the European Parliament’s Committee on the Internal Market and Consumer Protection, proposing changes to the original draft. Tim Buckingham and Hannah Nichols of Eversheds discuss how the proposed changes could have potentially damaging effects on UK merchant acquirers. / read more

In the struggle between governments and commercial organisations on the one side and criminals on the other, a new method of securing digital payments is being hailed in some quarters as a major step forward in preventing online fraud. That method is tokenisation, a process whereby instead of a customer sending payment card details when making a transaction, a ‘token’ is generated instead and sent to the merchant, before being converted back to real payment details by the authorised recipient. As the token itself is worthless to criminals, the argument goes that the security of the transaction is much enhanced. Mark Johnson, Chairman of the Risk Management Group, explains how tokenisation works and explores whether it is indeed the ‘silver bullet’ in the fight against fraud. / read more

Recently, controversy arose in China’s m-commerce market when Alibaba, the company behind the online shopping website Taobao, blocked the instant chat mobile app WeChat, the latest version of which had the potential to be utilised during transactions by Taobao sellers in such a way that transactions would thus take place outside of Taobao. Kevin Wang of CMS China discusses the block and whether it constitutes abuse of a dominant market position under Chinese anti-monopoly law. / read more

On 23 October 2013, the United States Securities and Exchange Commission (‘SEC’) unanimously voted to propose rules permitting equity crowdfunding as required by Title III of the Jumpstart Our Business Startups (‘JOBS’) Act. Under the proposal a company would be permitted to use a crowdfunding portal to offer securities and raise up to $1 million in any 12-month period from an unlimited number of investors regardless of their net worth or sophistication. The proposed rules are subject to a public comment period and the SEC would be required to take further action in order to enact the proposed rules into law. Scott H. Kimpel, Partner at Hunton & Williams LLP, Washington DC, explains the proposed rules and the doubts expressed by some that the SEC’s rules will fail to create a vibrant crowdfunding market. / read more

Mobile money transfer service M-Pesa has been a huge success story in Kenya, triggering the launch of rival services in the country. Thanks to the substantial investment by Safaricom, which owns M-Pesa, in inter alia branding and establishing a network of agents around Kenya, M-Pesa still enjoys a large portion of the mobile money market share. New regulations issued by the Kenyan government and aimed at increasing interoperability between mobile money networks now threaten to damage M-Pesa’s dominant position. John Syekei and Eunice Maema of Coulson Harney Advocates analyse the current position of M-Pesa, and discuss how the new regulations could affect the market. / read more

PayPal has produced a report on the m-payments landscape in Asia-Pacific (‘APAC’) entitled ‘Payments Regulation for Asia Pacific a Model for Innovation & Growth,’ in which it has developed some interesting ideas on dealing with the explosion in use of mobile devices and their use for online payments. The paper identifies the rapid increase in the use of mobile devices in the APAC region as reason to call for regulation of the m-payments sector, as Nahim Fazal, an Independent Cyber Security Consultant with a wealth of experience working in cyber security for leading banks, explains. / read more

Bitcoin is at a state of acceptance in most parts of the world. Yet there remains an almost complete absence of insurance designed to protect investors in Bitcoin companies, customers of Bitcoin companies, and those companies themselves. In any other industry where companies handle customer assets, insurance is required by law or simply for survival. But because governments around the world continue to grapple with the most fundamental of questions, such as what exactly is Bitcoin, little attention has been paid to the need for insurance in this space. / 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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