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E-Finance & Payments Law & Policy

Volume: 5 Issue: 8
(August 2011)


News

PayPal announced on 25 July it has agreed a partnership with the City of London Police ('CoLP') and the International Federation of the Phonographic Industry (IFPI), the trade body that represents the music industry, to cut funding to websites deemed 'illegal' by the IFPI and CoLP. / read more

The Reserve Bank of India (RBI) is stepping up its efforts in a bid to improve the security and quality of payment transactions in the country. / read more

Online peer-to-peer (P2P) lending is experiencing unprecedented levels of growth in the US, as the cost of borrowing from banks and credit cards remains high and the current economic climate uncertain, according to reports. / read more


Features

UK
US
China
US / read more

Since the EU Commission published, last December, its proposed regulation regarding migration to EU-wide credit transfer and direct debit ('the Regulation')1 which, among other things, proposes separate end-dates for migration to SEPA credit transfer and direct debit2, a debate on whether there should be two separate end-dates or one single migration date for this SEPA initiative has arisen. / read more

The Faster Payments Service (FPS) was launched in May 2008, as a UK banking initiative to reduce payment times between different banks' customer accounts, through speedy online transfers and by telephone. The original purpose for creating FPS was to replace the three-day cheque clearance process, and pressure was put on the banks by regulators to rectify this. Three years on and the industry's view is that FPS is not being used widely enough. And, it seems that few people can claim to know what the service is; in a study conducted by VocaLink in 2010, only one in four respondents stated they are definitely aware of FPS. / read more

Following a protracted and controversial political battle to block or delay its issuance, the Federal Reserve Board (FRB) issued the long-awaited Debit Card Interchange Fee and Routing Rule on 29 June 2011. The rule, implemented as FRB Regulation II ('Reg II'), will take effect 1 October 2011. As adopted, Reg II appears to be an attempt to balance the interests of retail merchants that lobbied hard for inclusion of Section 1075 of the Dodd-Frank Act ('DFA') - the 'Durbin Amendment' - and those of bank issuers and card networks that originally opposed inclusion of the Durbin Amendment in the DFA last year, and attempted to delay its effective date this spring. Stanton R. Koppel, Kevin Petrasic and Ky Tran-Trong, of Paul Hastings LLP, discuss the rules and analyse the expected impact on the payments and cards industry. / read more

"We...remain deeply concerned about China's continuing efforts to reserve its domestic payment card market for one state-owned enterprise, to the exclusion of American credit and debit card companies," said United States Trade Representative Ron Kirk, in February 2011. Several months on and the state of play is still the same, with the US launching a dispute resolution process with the World Trade Organization in a bid to create access to the Chinese electronic payments market. Mark R. Ludwikowski, Member at Sandler, Travis & Rosenberg, P.A., examines the situation to date and discusses the implications on the US card payments market. / read more

The 'Europay, Visa, Mastercard' standard (widely known as the 'EMV' standard) for card transactions has known exponential growth worldwide, backed by global concerns for transaction security and flexibility. However, despite some major advantages, there are still some countries - most notably the US and India - that have not yet migrated their transaction systems to such a standard. Andre Stoorvogel, Marketing Manager at Bell ID, outlines the current use of EMV technology and highlights the importance of global EMV acceptance to ensure long-term security and reduced fraudulent activity within the payments market. He also examines some of the reasons why migration to EMV may be hindered, using the US as an example. / read more

On 28 June 2011, the UK's Office of Fair Trading (OFT) published its findings on its investigation into payment surcharges, in particular those imposed by the passenger travel sector for online transactions. The OFT concluded that such payment surcharges make price comparisons more difficult for consumers, cause consumer detriment and can weaken competition between traders. Claire Brinn, an Associate at Field Fisher Waterhouse, discusses how the OFT's report will impact the practice of 'paying to pay'. / read more

The fight between merchants and card schemes over fees on card acceptance is not new. On the one hand, banks and card schemes claim that the fees they charge are essential to the viability of the system and, on the other, merchants in Europe and worldwide see these fees as profoundly unfair, disproportionate and anti-competitive. The latest round was fought out in the European Court of Justice, and is far from over. The outcome will have profound effects for the future of payments in Europe, as Cecile Gregoire and Ruth Milligan, of EuroCommerce, discuss. / read more


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About E-Finance and Payments Law and Policy

The monthly law journal covering legal issues in banking, e-finance, e-money and online payments including, mobile payments (m-payments), micropayments, pre-paid cards and other payment cards, online banking, NFC (near field communication) and other contactless payments, digital currencies such as Bitcoin, mobile wallets and virtual money, e-invoicing, e-billing and e-payments, card fraud and other cybercrime, as well as regulatory regimes such as the E-Money Directive (EMD and 2EMD), the Payment Services Directive (PSD), SEPA, the US Electronic Money Regulations 2011, and the UK Bribery Act 2010. / read more