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Payments stream - Regulation and mandatory changes

Jul 17, 2015

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swift

  • SWIFT Nordics Regional

    Conference 2015

    Payments stream - Regulation and

    mandatory changes in the payments

    space what are the real game

    changers?

    Copenhagen, 4 5 March 2015

  • Nordics Regional Conference - Speakers

    Jorge B. Jensen, Head of Section Finance, Department of Consumer Advocacy, Norwegian Consumer Council

    (Forbrukerradet)

    Kirstine Nilsson, Senior Vice President, SEPA & EU Payment Regulation Coordinator, Swedbank

    Carsten Thaarup, Senior Industry Expert, Nordea Bank Danmark A/S

    Erkki Poutiainen, Senior Vice President, Public Affairs, Nordea (moderator)

  • Regulation and mandatory change

    Payment stream, SWIFT Nordic Conference

    4.-5. March 2015, Copenhagen

  • Selected approach to the theme

    New payment regulation: PSD2 and its impact

    Managing mandatory change in multi-country (Nordic) set-up

    SEPA compliance in euro and non-euro countries

    ISO 20022

    New regulations

    Payment services and change seen from customer perspective

    But first a little wider introduction

    26/02/2015

    4

  • Regulation and mandatory change

    What drives the change in the payment ecosystem?

    Does the market response lead to greater customer value?

    Regulation is the politicians method to control/guide the developments into desired directions

    Does the current regulation lead to better customer value?

    Does compliance provide sufficient customer value?

    For a supplier of payment services to survive, what is the additional

    mandatory change to observe and act upon?

    26/02/2015

    5

  • Payments:

    Megatrends and key regulatory objectives

    (EU) regulators policy objectives

    Growth and Jobs

    Overall efficiency

    Internal market for citizens

    eGovernment

    Global competitiveness

    Innovation through open competition

    Citizens access to basic services

    Consumer protection

    Security & anti-crime

    Market megatrends

    relevant to payments

    Globalisation

    Technology, Digitalisation

    and Mobility

    Sosiografic changes

    26/02/2015

    6

  • Developing regulatory environment for payments

    Efficiency, competition and consumer protection

    SEPA 1.0 (end date regulation), ISO 20022

    Review of the Payment Service Directive - PSD2,

    Interchange Fee Regulation

    Payment Account Directive

    E-Government area (e-Invoicing, e-IDAS)

    Governance: Euro Retail Payment Board EPC put aside

    Public authority pushing for innovation

    E.g. instant payment initiative from ECB

    Compliance in the new digital, real-time environment of low-value and mass-payments

    Security, Anti-crime policies (SecuRePay -> EBA Guidelines, Cybersecurity)

    Anti-Money Laundry

    Sanctions

    Cyber-security in the wider digitalised economy and society

    Regulatory objectives,

    methods and

    instruments

    26/02/2015

    7

  • Bank

    account

    Payment regulation and connections to the services

    Basic payment

    account

    Electronic administration and orders

    Payment card (incl. Internet payments)

    No credit, no limits

    TPP access to

    bank account

    One leg out,

    Other currencies

    Transparency,

    reporting

    Strong

    authentication

    PSD2

    Payment

    Account

    Directive

    (PAD) Credit

    transfer

    Direct debit

    Debit/

    credit card

    Online

    credentials

    E-& m-

    payments

    SEPA

    end-date

    AMLD4

    SecuRePay

    Guidelines

    Interchange Fee

    Regulation

    Paym

    ent

    pro

    cessin

    g

    Funds Transfer

    Directive (FATF)

    NIS

    Network and

    information security

    26/02/2015

    8

  • New (regulated) parties in the payment value chain

    26/02/2015

    9

    Consumer Merchant

    Consumers account

    Bank A

    Consumers account

    Bank A

    Online

    bank Online

    bank E-

    payment POS

    Card

    Service layer

    Payment infrastructure

    Cards, Credit transfers, Direct debits

    Third party payment

    service provider Third party payment

    service provider Third party payment

    service provider Third party payment

    service provider

  • Regulation

    Service provider: What change to be pro-active with ?

    Globalisation

    Technology, Digitalisation

    and Mobility

    Sosiografic changes

    26/02/2015

    10

  • How does this sound to the customer?

    The change is bringing new supplier parties to the game

    Observations

    Benefits?

    Concerns?

    Further wishes?

    26/02/2015

    11

  • Session participants

    Jorge B. Jensen, Head of Section Finance, Department of Consumer Advocacy, Norwegian Consumer Council (Forbrukerradet)

    Kristine Nilsson, SEPA & EU Payment Regulation Coordinator, Swedbank

    Carsten Thaarup, Senior Industry Expert, Nordea

    Erkki Poutiainen, Senior Vice President, Public Affairs, Nordea (moderator)

    26/02/2015

    12

  • Swedbank

    PSDII Third Party Payment Service Provider

    - introducing the specialised middleman

    Copenhagen 2015-03-04

    Kirstine Nilsson

  • Swedbank

    PSDII - Third Party Payment Service Provider

    Regulator initiatives Lisbon Agenda

    to make the EU "the most competitive and dynamic knowledge-based economy

    in the world capable of sustainable economic growth with more and better jobs

    and greater social cohesion", by 2010

    Europe 2020

    For advancement of the economy of the European Union.

    It aims at "smart, sustainable, inclusive growth" with greater coordination

    of national and European policy.

    Digital Agenda

    A digital agenda for Europe: to speed up the roll-out of high-speed

    internet and reap the benefits of a digital single market for

    households and firms.

    Scope of PSDII - TPP Through Increase competition;

    Increase consumer and Merchant choice (e/m) Payment solutions

    Break up of the Payment value chain While at the same time Maintain Consumer protection

  • Swedbank 15

    PSDII - Third Party Payment Service Provider

    Customer requirements

    Swedish Post Office in cooperation with Svensk Distanshandel and HUI Research

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    E-Merchant; Reach, Conversion, Fair cost

  • Swedbank 16

    PSDII - Third Party Payment Service Provider

    Increase competition Break up the payment value

    chain

    Cash

    register and

    terminal

    Terminal providers replaced by PSPs 1

    Provide payment processing and value added services of their own

    New

    integrators

    New players providing account based payment instruments

    New and old players providing enhanced consumer credit

    products

    3

    Account

    challengers

    Banks will be challenged by new payment service providers 4

    Regulations

    Regulators open up the unique position of account holders to offer

    payments

    5

    PSPs 2

  • Swedbank

    PSDII - Third Party Payment Service Provider

    The payment value chain

    17

    - is only as strong as the

    weakest link.

  • Swedbank

    PSDII - Third Party Payment Service Provider

    THANK YOU FOR LISTENING

    Kirstine Nilsson

    SEPA & EU Payment

    Regulation Coordinator

    Swedbank [email protected]

  • EU Regulation for a bank operating inside and

    out of Euroland

    SWIFT Nordics Conference

    Carsten Thaarup 5 March 2015

  • SEPA Coverage

    20

    EU, non-Euro zone

    countries

    (9)

    Bulgaria

    Croatia

    Czech Republic

    Denmark

    Great Britain

    Hungary

    Poland

    Romania

    Sweden

    EFTA

    countries

    (6)

    Iceland

    Norway

    Liechtenstein

    Monaco*

    Switzerland*

    San Marino*

    *Not part of the EEA Agreement, but has a bilateral agreement with the EU

    EU, Euro zone

    countries

    (19)

    Austria

    Belqium

    Cyprus

    Estonia

    France

    Finland

    Germany

    Greece

    Ireland

    Italy

    Latvia

    Lithuania

    Luxenbourg

    Malta

    Netherlands

    Portugal

    Slovak Republic

    Slovenia

    Spain

  • Many interests and decision making actors

    European Union

    European Parliament

    The Commission

    The Council

    European Central Bank

    National legislation & common practise

    All of which with (often) different objectives and priorities

    21

  • 22

    A flurry of regulations with a considerable combined impact

    Securities Law

    Directive

    Financial

    Transaction

    Tax, FTT

    Recovery and

    Resolution for

    FMIs

    Liikanen

    (Structural

    reforms)

    Shadow

    Banking

    MiFID II /

    MiFIR EMIR

    Short

    Selling

    CSD

    regulation

    PRIPs

    Margin proposal

    for O