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Dec 3, 2013 (3 years and 10 months ago)

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eSEPA Newsletter No 8 Page 1/14
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8
8

Autumn/Winter 2012

As we approach the end of an eventful year, we look ahead to an equally
busy 2013

Dear reader,

This issue covers a wide range of news items and publications on retail payment
innovations and regulation that have caught our attention since the summer. As you can
see, regulatory measures again feature prominently.

Further significant developments are scheduled for next year: final preparations for the
end date for SEPA migration, a new governance structure for European retail payments
and the revision of the Payment Services Directive, to mention just a few. The
Eurosystem will continue contributing to all of these initiatives. Watch out for news on the
ECB website at www.sepa.eu
.


Your eSEPA Team
European Central Bank (ECB)
Market Integration Division






Green paper on card, internet and mobile payments: feedback from European
Commission; European Parliament resolution
In June t
he Commission published
f
eedback on the
g
reen
p
aper
entitled
“Towards an
integrated European market for card, internet and mobile payments”, summarising the
results of a consultation process launched in January 2012. In November the European
Parliament adopted a resolution with the same scope and title.

 Link to feedback http://ec.europa.eu/internal_market/payments/docs/cim/gp_feedback_statement_en.pdf

 Link
to Commission web page on card, internet and mobile payments
http://ec.europa.eu/internal_market/payments/cim/index_en.htm

 Link to Parliament resolution
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-
2012
-
0426+0+DOC+XML+V0//EN&language=EN


Single Market Act II: Commission communication
K
ey actions
announced by

the Commission in this communication in October
include
legislative proposals relating to (i) the revision of the Payment Services Directive,
(ii) multilateral interchange fees and (iii) the objective of making electronic invoicing the
standard invoicing method for public procurement. These proposals are set to be
presented in
the second quarter of

2013
.



Link

to
communication
http://ec.europa.eu/internal_market/smact/docs/single
-
market
-
act2_en.pdf



Electronic identification and trust services in the EU: Commission proposal for a
regulation
In June t
he Commission adopted a pro
posal
for a
r
egulation on

electronic identification
and trust services for electronic transactions in the internal market

.
The
proposed
new
T
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eSEPA Newsletter No 8 Page 2/14
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Autumn/Winter 2012

framework for electronic identification and trust services
aims to e
nsure mutual
recognition and acceptance of electronic identification across borders
. It is also
intended to ensure the legal effect and mutual recognition of trust services, enhancing
current rules on e-signatures and providing a legal framework for electronic seals, time
stamping, electronic delivery, website authentication and the acceptability of electronic
document
s
.

 Link
to draft regulation
http://ec.europa.eu/information_society/policy/esignature/eu_legislation/regulation/index_en.htm



Q&A

on

the proposal
http://europa.eu/rapid/press
-
release_MEMO
-
12
-
403_en.htm?locale=en



Financial inclusion in the EU: Parliament and Commission act on access to basic
payment accounts
In
July
2012
the European Parliament passed a resolution
containing

detailed
recommendations for the European Commission with the aim of ensuring access to
basic payment services for all consumers legally resident in the EU. In principle, it is
recommended that all payment service providers, as defined in the Payment Services
Directive (i.e. Directive 2007/64/EC), that offer payment accounts to consumers as an
integral part of their regular business be obliged to provide basic payment accounts.
The resolution requested that the Commission (i) provide a detailed assessment of the
state of play in all Member States by September 2012 and (ii) submit, by January 2013,
a proposal for a directive ensuring access to basic payment services (assuming that
the detailed assessment points to a need for such a proposal).
The Commission had already published a r
ecommendation on access to basic
payment accounts in July 2011 “with the aim of ensuring that consumers can open and
use a basic payment account with a set of essential payment services, free of charge
or at a reasonable charge, regardless of their place of residence in the Union and
financial situation”. Member States had been invited to adopt the measures necessary
to ensure the implementation of the recommendation in the six months following its
publication (i.e. by early 2012). In August 2012 the Commission published a staff
working document detailing the measures reported as being in place at national level,
assessing the extent to which Member States were
complying with the
recommendation. That paper concluded that the Commission “
may propose any
necessary action or measure in order to ensure
that the objectives of the
Recommendation are met in full throughout the Union

.


 Link to Parliament resolution
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-
%2f%2fEP%2f%2fTEXT%2bTA%2bP7-TA-2012-0293%2b0%2bDOC%2bXML%2bV0%2f%2fEN&language=EN

 Link to Parliament news
http://www.europarl.europa.eu/news/en/headlines/content/20120628STO47904/html/EP-
wants-access-to-basic-banking-services-for-all

 Link
to Parliament press release
http://www.europarl.europa.eu/news/en/pressroom/content/20120704IPR48262/html/Basic-banking-services-must-
be-available-to-all

 Link
to Commission web page on financial inclusion, including the 2011 recommendation and the staff working
document
published in August 2012
http://ec.europa.eu/internal_market/finservices
-
retail/inclusion_en.htm



2012 Digital Content Sweep: EU-wide screening of compliance with consumer
protection rules
In December 2012 t
he Commission
published the results of EU
-
wide screening of
websites selling digital games, books, videos and music available to download. National
authorities checked contact details, contractual terms and whether
online merchants
provided essential information on the main characteristics and prices of digital content.
The Commission
ordered

a
complementary
study

looking

at
(i)
information
given
to






eSEPA Newsletter No 8 Page 3/14
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Autumn/Winter 2012

consumers about whether
or not
they can use downloaded digital c
ontent in another
country and (ii) online games targeting children which are advertised for free, but may
involve payment at a later stage (“in-game purchases”).
The Commission reports that more than 75% of the websites checked did not appear to
comply with consumer protection rules. National enforcement authorities will now
contact the companies concerned to enable them to clarify their positions
or correct
their website
s
.

 Link
to the Commission web page on the Digital Content Sweep
http://ec.europa.eu/consumers/enforcement/sweep/digital_content/index_en.htm



Link

to FAQ
s

on
the D
igital
C
ontent
S
weep
http://europa.eu/rapid/press
-
release_MEMO
-
12
-
945_en.htm



Eurobarometer: one in five internet users in EU is victim of online fraud or ID
theft
A European Commission survey
involving

27,000
respondents

across
all EU
M
ember
States shows that 12% of internet users have experienced online fraud and 8% have
fallen victim to identity theft.
While almost three-quarters of those polled agreed that the risk of becoming a victim of
cybercrime had increased in the past year, more than half had not changed their
passwords in the previous 12 months. 29% of respondents were not confident about
their ability to use the internet for activities such as online banking or online purchases.
A new cybercrime unit is set to open in January 2013 at Europol headquarters in The
Hague. The new European Cybercrime Centre will focus on illegal online activities
carried out by organised crime groups, especially attacks targeting e-banking and other
online financial activities.

 Link to full report http://ec.europa.eu/public_opinion/archives/ebs/ebs_390_en.pdf



Country fact sheets

http://ec.europa.eu/public_opinion/archives/eb_special_399_380_en.htm#390



Financial services: results of Commission consultation on bank accounts
In March 2012 the European Commission publishe
d a consultation document on bank
accounts, with responses due by June. The objective was to gather stakeholders’
views on (i) the transparency and comparability of bank fees, (ii) the process of
switching bank accounts and (iii) access to basic payment accounts, in order to assess
the need for action at EU level. In July the Commission published a summary of the
contributions received.



Link

to
consultation on bank
accou
nts
http://ec.europa.eu/internal_market/finservices
-
retail/policy_en.htm



Financial stability: Commission consultation on a possible framework for the
recovery and resolution of non-bank financial institutions
Th
is

consultation paper



which was

launched in October
,

with responses requested by

28 December – looks to ascertain how and when the failure of a financial institution
other than a bank can threaten financial stability. The main institutions considered in
this respect are financial market infrastructures (such as central counterparties and
central securities depositories) and systemically important insurance companies. It also
looks at the arrangements that could be needed in order to prevent the failure of such
institutions
from compromising financial stability.





Link

to consultation
http://ec.europa.eu/internal_market/consultations/2012/nonbanks_en.htm









eSEPA Newsletter No 8 Page 4/14
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Autumn/Winter 2012

E-money: report on anti-money laundering (AML) and counter-terrorist financing
(CTF) requirements and supervision in Europe
In May 2011 t
he
Anti
-
M
oney

Laundering Committee

of the
Joint Committee of the
European Supervisory Authorities established a working group to identify and assess
issues arising from the various national approaches to AML and CTF supervision with
respect to entities involved in the electronic money distribution chain. The group
gathered data and sought dialogue with stakeholders in three ways: (i) a questionnaire,
(ii) a seminar for supervisors and (iii) exchanges of information with the European
Commission.
The report published in December 2012 provides an overview of Member States’
implementation of European AML and CTF requirements. It reveals significant
differences between Member States in terms of their interpretation of the Second
E-Money Directive and the treatment of e-money issuers, their agents and their
distributors for AML and CTF purposes. These differences are reported to be the result
of legal uncertainty caused by insufficient or ambiguous information on concepts that
are key to the understanding and regulation of the electronic money market.
The Joint Committee considers that the Commission should use the opportunity
afforded by the ongoing revision of the Third Anti-Money Laundering Directive and the
Second

E
-
Money Directive to address these issues as a
matter of priority.

 Link to report
http://eba.europa.eu/cebs/media/Joint-Committee/JC-2012-086--E-Money-Report----December-
2012.pdf




Money laundering: Commission feedback on a report on the implementation of
the Third Anti-Money Laundering Directive
In

April 2012 the Commission
r
eport
ed

to the European Parliament and the Council on
the implementation of the Third Anti-Money Laundering Directive (
i.e. Directive
2005/60/EC) and invited all interested stakeholders to comment on its considerations.
The feedback provided – details of which were published in July – generally confirmed
the issues highlighted in the Commission’s report. Broad support was expressed for
both (i) the proposed alignment with the revised Financial Action Task Force (FATF)
standards and (ii) greater clarification of certain issues, particularly in the area of data
protection and cross
-
border situations.

 Link to web page http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm#news



Link

to
2012
FATF
r
ecommendations
http://www.fatf
-
gafi.org/topics/fatfrecommendations/



E-invoicing: Commission report on e-invoicing standards and EESPA work on
model interoperability agreement
In September the Commission published a
report
en
titled

e
-
Invoicing Standardisation
:
Overview, issues and conclusions for future actions”. This document addresses major
aspects of e-invoicing standardisation and draws some conclusions as regards future
action.
The European E-invoicing Service Providers Association (EESPA) is a European trade
association for e-invoicing service providers. Its members include organisations
providing network, business outsourcing, financial, technological and EDI services. The
EESPA announced in June that it was developing a bilateral model interoperability
agreement governing interaction between service-
providers on behalf of their
customers.



Link

to
report
http://ec.europa.eu/enterprise/sectors/ict/files
/invoicing/e
-
invoicing
-
standardisation
-
overview
-
issues
-






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Autumn/Winter 2012

and
-
conclusions
-
for
-
future
-
actions_en.pdf


 Link
to EESPA press release
http://www.eespa.eu/sites/default/files/EESPA
-
Information%20Release%2020120608_0.pdf



ENISA publishes recommendations on online bank robberies targeting “high
rollers”
In July 2
012 the
European Network and Information Security Agency

(ENISA)
published recommendations on online banking security, stating (i) that banks should
assume that customers’ computers are infected with online banking malware and
(ii) that it is important to cross-check the value and destination of certain transactions
via trusted communication channels using trusted devices.
The recommendations were published in response to a white paper published by
McAfee and Guardian Analytics. That white paper analyses “high-roller” cyberattacks
on wealthy corporate bank accounts. After monitoring 60 bank servers, the authors of
that paper estimated that the total value of attempted fraud was at least €60 million.
These cyberattacks comprised three phases. First, victims with access to accounts with
large balances (hence the term “high rollers”) were singled out. Then malware was
loaded onto victims’ PCs, tailored to the victims’ online banking websites. The malware
was triggered when the victims began online banking sessions. Later, fraudulent
automated transactions were carried out in the name of those users and hidden from
them behind warning and waiting messages. The malware transferred money from
savings accounts to payment accounts, and then to mules abroad, which took the cash
and sen
t

it on using person
-
to
-
person money transfer
systems.

 Link to ENISA press release
http://www.enisa.europa.eu/media/press-releases/eu-cyber-security-agency-enisa-
201chigh-roller201d-online-bank-robberies-reveal-security-gaps

 Link
to white paper entitled “Dissecting Operation High Roller”
http://www.mcafee.com/us/resources/reports/rp
-
operation
-
high
-
roller.pdf



Ecommerce Europe position paper on e-payments
Ecommerce Europe
is
a
European collective
comprising

merchant

organisations and
their members. Individual merchants can also be direct members. Ecommerce Europe
has set up a working committee with the aim of effectively communicating the views of
European merchants on issues surrounding e-payments.
In a position paper published in November, Ecommerce Europe set out ten
recommendations on steps that need to be taken in order to create an effective, flexible
and efficient regulatory framework that stimulates trust in (cross-border) e-commerce
transactions. One key message for the financial industry is that it should “intensify
innovation in the

field of ‘customer
-
not
-
present’ solutions for e
-
commerce transactions

.

 Link to paper http://www.ecommerce-europe.eu/publications/2012/10/position-paper-e-payments-2012



Link

to Ecommerce Europe
’s website

www.ecommerce
-
europe.eu



2011 payment statistics in the Statistical Data Warehouse
The ECB

s Statistical Data Warehouse (SDW) now contains

statistics on non
-
cash
payments from 2000 to 2011. The statistics that used to be published in the Blue Book
Addendum are now presented in the SDW’s “Reports” section. Methodological data on
the
se

payment statistics can be accessed through the dedicated ECB web page
.


 Link to the SDW http://sdw/browse.do?node=2746

 Link to SDW reports on payments http://sdw/reports.do?node=100000760



Link

to methodolog
ical data

http://www.ecb.europa.eu/stats/payments/paym/html/index.en.html









eSEPA Newsletter No 8 Page 6/14
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Autumn/Winter 2012

Vodafone mobile wallet to be launched in 2013
In
October Vodafone announced
that
it would
begin

offering a mobile payment product
to customers in mid-2013. Mobile wallet provider CorFire and digital security company
Gemalto would be its partners in this project. It plans, initially, to launch this service in
Germany, the Netherlands, Spain, Turkey and the U
nited
K
ingdom
.

 Link
to article in “Mobile Payments Today”
http://www.mobilepaymentstoday.com/article/202807/Vodafone
-
to
-
launch
-
biggest
-
mobile
-
wallet
-
next
-
year




Finland: e-invoicing study and preparations for direct debit migration
The Federation of Finnish Financial Services has launched a series of surveys on the
use of e-invoicing and direct debits by companies in Finland. The latest results were
published in May 2012.
It has also published information on how exactly the national direct debit service will be
terminated (a process set to be completed by February 2014), including details of
creditors’ automatic migration to e-invoicing or SEPA direct debits (called “direct
pa
yment
s”
).

 Link
to results of e-invoicing survey
http://www.fkl.fi/en/themes/sepa/Dokumentit/Use_of_e-invoicing_in_finnish_companies.pdf



Link

to
details of
SEPA migration in Finland
http://www.fkl.fi/en/themes/sepa/Pages/default.aspx



Belgium: Proton e-money card service to terminate by end-2014
T
he Belgian company Bancontact
-
MisterCash
has
announced th
at

the Proton e
-
money
service
will terminate
by the end of 2014
.

 Link to press release
http://www.bancontact.com/en/about-bancontact-mistercash-company/news/bancontact-
mister-cash-expands-its-product-range



Link

to i
nformation on
PIN
-
free
payments
http://www.bancontact.com/en/cardholders/innovation/pin
-
free
-
payment



Germany: iZettle to be launched on the German market; payleven to be tested in
taxis in Berlin
In October
iZettle
announced a
partner
ship

with DZ BANK and Deutsche Telekom
with
a view to launching its payment service in Germany. The iZettle service was first
launched in Sweden in 2011 and is currently available in Norway, Denmark, Finland
and the United Kingdom. iZettle allows
customers to accept payments via their
smartphones. The card acceptor gets an app and a card reader, or just the app. The
card’s chip can be read using the card reader, or the card details are entered directly in
the smartphone. The card transaction is confirmed by means of the cardholder’s
signature on the touchscreen of the smartphone. iZettle says that no sensitive data
relating to the cardholder are stored on the mobile device and that end-to-end
encryption is provided. iZettle is registered as a payment institution and supervised by
the Swedish Financial Supervisory Authority.
payleven, an alternative service that
turns a smartphone or tablet into a card
acceptance terminal, has launched a pilot scheme with the
taxi association
Taxiverband Berlin Brandenburg, in cooperation with the telecommunications provider
Telefónica Germany.

 Link
to iZettle press release
http://www.izettle.com/press/releases/2012/10/izettle-goes-to-germany-with-dz-bank-and-deutsche-telekom



Link

to
payleven
press releases
https://payleven.co.uk/press/








eSEPA Newsletter No 8 Page 7/14
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Facebook rolls out mobile payment services via carrier billing
Facebook
has
announced

the roll
-
out of
an
enhanced mobile payment process for
purchases made using mobile web applications. The company Bango is providing
mobile web carrier billing for Facebook. The service has already been launched in
France, Germany, the United Kingdom and the United States and is expected to be
rolled out in

other countries

in due course
.

 Link to blog
http://techcrunch.com/2012/09/24/facebook-mobile-payments-via-carrier-billing-and-bango-now-live-in-
u-s-uk-and-germany/

 Link
to press release
http://news.bango.com/2012/11/18/announcement
-
fro
m
-
our
-
partner
-
orange
-
france/#more
-
1754



United States: white paper on cross-border remittance transfers (Dodd-Frank
Act, Section 1073)
The Payments Market
Practice

Group and the Clearing House Association published
this white paper in October. Section 1073 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act establishes a new regulatory framework governing
cross-border electronic transfer payments originated by US consumers.
Section 1073 establishes certain disclosure requirements which oblige US-based
remittance transfer providers to know the exact costs
and delivery terms for
consumer-initiated international payments. The regulation applies to all
consumer-initiated international electronic transfers with a value of more than USD 15,
including those that are traditionally executed through correspondent relationships
using SWIFT, local RTGS systems and other large-value clearing systems. It also
applies to international ACH payments, closed network remittance payments, online bill
(push) payments to foreign payees and money loaded onto certain prepaid cards. The
deadline for

mandatory compliance is 7 February 2013.



Link

to white

paper
http://www.swift.com/resources/documents/PMPG_Dodd_Frank_1073_Whitepaper_v2.0.pdf



Reserve Bank of Australia: strategic review of innovation in the payment system
L
aunched in 2010, t
h
is

s
trategic
r
eview

look
ed

at possible gaps in

the Australian
payment system that might need to be filled through innovation over a period of five to
ten years. A number of specific areas identified as potential gaps were addressed in a
paper entitled “Conclusions” which was published in June 2012. The initial strategic
objectives of that paper were (i) same-day settlement of direct debit payments,
(ii) real-time retail payments, (iii) availability of payment systems outside normal
banking hours, (iv) enabling additional remittance data to be sent with payments and
(v) enabling payments to be addressed more easily (e.g. using simple identifiers).
In November the Reserve Bank of Australia issued core criteria for the “Fast Payments
Solution” that it is seeking to establish. That should enable businesses and consumers
to make payments in real time (with funds available to the recipient almost
immediately)
by the end of 2016.

 Link
to “Conclusions”
http://www.rba.gov.au/payments-system/reforms/strategic-review-innovation/conclusions/index.html

 Link to summary of consultation process
http://www.rba.gov.au/payments-system/reforms/strategic-review-
innovation/summary-consultation/pdf/summary-consultation-2012.pdf

 Link to core criteria for the “Fast Payments Solution”
http://www.rba.gov.au/payments-system/reforms/strategic-
review
-
innovation/201211
-
rba
-
core
-
criteria
-
fast
-
pay
-
solution/index.html










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Reserve Bank of Australia: changes to surcharging practices for payment cards
In 2003 the Reserve Bank
of Australia
imposed surcharging standards on credit card
schemes, requiring the abolition of “no surcharge” rules imposed by those schemes. A
similar standard was introduced for debit card schemes in 2007.
The abolition of these rules allowed merchants to pass on the cost of card transactions
to their customers via a surcharge. The Reserve Bank’s assessment was that such
surcharging improved price signals to cardholders about the relative costs of the
various payment methods and gave merchants a way of exerting downward pressure
on costs resulting from their acceptance of credit cards.
In recent years, however, excessive
surcharging practices have become more
widespread. In light of these developments, the Reserve Bank’s Payments System
Board decided in May 2012 to amend the current surcharging standards and allow card
schemes to limit surcharges to a level that reasonably reflects the cost of card
acceptance.

 Link to paper
http://www.rba.gov.au/payments-system/reforms/cards/201206-var-surcharging-stnds-fin-ref-
ris/pdf/201206
-
var
-
surcharging
-
stnds
-
fin
-
ref
-
ris.pdf



CPSS Red Book: Volume 2 published
Volume 2

of the descriptive
publication


Payment, cleari
ng and settlement systems in
the CPSS countries” (known as the “Red Book”) was published in late November. It
covers 13 CPSS countries (Belgium, China, France, Germany, Hong Kong SAR, Italy,
Japan, the Netherlands, Saudi Arabia, South Africa, Turkey, the United Kingdom and
the United States) and the euro area. It also includes a chapter on international
arrangements.



Link

to
Red Book
http://www.bis.org
/publ/cpss105.htm









ECB
report on the social and private c
ost
s

of
making
payments
in Europe

A report
published

by the ECB analyses the social and private costs of making retail
payments in 13 European countries and discovers that they are substantial, amounting
to around €45 billion, almost 1% of the combined GDP of those countries. If that were
extrapolated to the level of the 27 Member States of the EU, those costs would total
around €130 billion.
This study is the first comprehensive cross-country analysis of the aggregate cost of
making payments when purchasing goods and services. It was conducted by the ECB
in cooperation with the central banks of Denmark, Estonia, Finland, Greece, Hungary,
Ireland, Italy, Latvia, the Netherlands, Portugal, Romania, Spain and Sweden.
The study finds, on the basis of a representative sample, that cash payments account
for nearly half of total costs. As the most commonly used payment instrument, cash
has, on average, the lowest social cost per transaction (at €0.42), closely followed by
debit cards (which have a social cost of €0.70 per transaction). Cheques are the most
expensive form of payment, with unit costs of €3.55. However, in some countries, cash
does not have the lowest unit costs. In five of the countries studied, costs were lower
for debit cards.
Cross
-
country variation

depend
s

on characteristics specific to
the
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relevant

payment system, on the
size of the relevant
market and its development, and
on payment behaviour.

 Link to study http://www.ecb.europa.eu/pub/pdf/scpops/ecbocp137.pdf?a991d89beea0454a897b8809d11daa9b



Link

to press release
http://www.ecb.europa.eu/press/pr/date/2012/htm
l/pr121001.en.html



ECB
r
eport on virtual currencies

This report, which was p
ublished in October,
seeks to provide clarity on the topic of
virtual currencies and tries to adopt a structured approach to this issue. Such an
approach has – to some extent, at least – been absent from the literature thus far, and
no references have been made to this issue in publications produced by central banks,
international organisations and public authorities. As a result, this report is based
largely

on information and

data gathered from material published on the internet
.

 Link to report http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf

 Link
to other ECB reports on retail payment innovation
http://www.ecb.europa.eu/paym/sepa/innovation/html/index.en.html#reports



ECB card fraud report 2012
In July 2012 t
he ECB published its first report on card fraud. The report was compiled
by the Eurosystem (i.e. the ECB and the 17 national central banks of the euro area). Its
main findings are that card fraud has been declining since 2007 and that technological
advances have been key in increasing the security of transactions.
Improvements in the security of cards and the underlying payment infrastructure are the
main reason why fraud levels at ATMs and POS terminals were lower in 2010 than they
had been in 2007. The most important advance was the wider adoption of the
chip-based EMV standard. This
offers stronger security features than conventional
magnetic stripes, both for the card itself and for the technological infrastructure behind
the transaction. The adoption of these security features is recommended by the ECB
and forms part of the SEPA migration process.
As card-not-present (CNP)
transactions do not benefit from these security
improvements, CNP fraud has been on an upward trend, both in absolute and in
relative terms. Its share of total fraud increased from 47% to 50% in the period 2007-10,
while the absolute value of such fraud increased from €571 million to €648 million (with
a peak of €684 million in 2009). The vast majority of CNP payments (74%) were
initiated over the internet.

 Link to press release http://www.ecb.europa.eu/press/pr/date/2012/html/pr120725_1.en.html

 Link
to report
http://www.ecb.europa.eu/pub/pdf/other/cardfraudreport20120
7en.pdf?144595c192854e2aa38bcf2871bf5a1e



Mobey Forum white paper: “Mobile Wallet: The Hidden Controls”
Mobey Forum’s third
white paper

on mobile wallet
s
,
en
titled

Mobile Wallet: The Hidden
Controls”, looks at how consumers and merchants will engage w
ith mobile wallet
technology in their future day-to-day activities.

It aims to educate stakeholders,
encouraging them to develop business models that will both
generate revenue and
optimise

the benefits of mobile wallet technology

for consumers
.


 Link to press release
http://mobeyforum.org/Press-Resources/Press-Releases/Mobey-Forum-White-Paper-
Reveals
-
the
-
Hidden
-
Controls
-
Holding
-
Back
-
Mobile
-
Wallet
-
Development










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SWIFT: strategies for banks in the field of mobile payments
This white paper,
which was
published by SWIFT in May 2012, identifies
three areas
in
which there are strategic opportunities for banks in the field of mobile payments. The
first is mobile banking – using a mobile phone to access a bank account and make
payments – which will make banking more convenient for customers. The second is
mobile commerce – using a mobile phone to buy products. Banks could form
partnerships with e-commerce companies, learning about these new developments
and offering financial services as part of the shopping experience. The third is mobile
money transfers – using a mobile phone to send money between individuals, both
domestically and cross-border. The paper suggests that banks should consider bolder
moves

in this
area
.




Link

to
white paper
http://www.swift.com/res
ources/documents/SWIFT_white_paper_Mobile_Payments.pdf



McKinsey: card processing in Europe
This article was published by McKinsey in June as part of a set of articles on payment
issues. It reports that the European card market handles a quarter of the world’s card
transactions and generates annual revenues of €9.2 billion. However, the authors see
the industry model as being at risk, with margins shrinking at an average annual rate of
4% since 2004. They examine the forces eroding margins and outline three ways of
securing new sources

of valu
e in the difficult period ahead.

 Link
to article
http://www.mckinsey.com/clientservice/Financial_Services/Knowledge_Highlights/Recent_Reports/~/media/Report
s/Financial_Services/MoP14_Card%20processing%20in%20Europe.ashx


French Observatory for Payment Card Security publishes 2011 annual report
Th
is

annual report,
which was
published in July 2012, shows key trends in card fraud in
France. It also examines innovative solutions that turn mobile phones into payment
terminals
, as well as

new online payment solutions (
such as
digital wallets).




Link

to press release
http://www.banque
-
france.fr/observatoire/telechar/gb/2011/press
-
release
-
report
-
2011.pdf



United Kingdom: 2011 survey on cost of payment collection
T
he British Retail Consortium has compiled figures from retailers quantifying the
development of self-service tills and contactless/electronic payment methods. The
retailers participating in the survey account for almost 60% of total retail spending. In
response to increasing customer demand, one in five of those retailers’ tills (which
number almost 150,000 in total) are now self-service. The range of retailers offering
self-service has also increased. One-quarter of self-service tills – and almost 30% of all
tills – are now able to accept contactless payments.
In 2011 e-payment systems were used in 150 million transactions,
with a total
transaction value of GBP 1.2 billion. One-third of all respondents said that they had
accepted e-payments made via PayPal, Google Checkout or Amazon Payments in
2011. Half indicated
that
they
would
be ready to
do so
by the end of 2012.

 Link to survey http://www.brc.org.uk/downloads/BRC_Cost_of_Collection_Survey_2011.pdf

 Link
to analysis of future payment methods (addendum)
http://www.brc.org.uk/downloads/Cost_of_Collection_Part_2_Handout_Draft_140712.doc










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Federal Reserve Bank of Boston: papers on consumers’ adoption of payment
instruments and the impact of the 2011 debit card interchange fee reform
Working Paper
No
12
-
14

develops and estimates a structural

model
capturing the

adoption and use of payment instruments by US consumers. The authors use a
cross-section of data from the Survey of Consumer Payment Choice, a new survey of
consumer behaviour, and evaluate substitution and income effects. The simulations
shed light on consumers’ response to the 2011 rules on interchange fees for debit
cards that were imposed by the Dodd-Frank Act, as well as the proposed agreement
between Visa and MasterCard and the Department of
Justice that would allow
merchants to impose surcharges covering the cost of accepting payment cards.
Public Policy Discussion Paper No 12-6 looks at who gains and who loses from the
2011 debit card interchange fee reform. The
new rules governing debit card
interchange fees limit the maximum permissible interchange fee that an issuer can
charge merchants for a debit card transaction. The discussion paper provides simple
calculations that identify the transaction values for which merchants pay higher and
lower interchange fees under the new rules. The paper then uses new data from the
Federal Reserve Bank of Boston’s 2010 and 2011 “Diary of Consumer Payment
Choice” to identify the types of merchant who are likely to pay higher and lower
interchange fees under the new rules.


 Link to working paper http://www.bostonfed.org/economic/wp/wp2012/wp1214.htm and presentation
on
consumers’ choice of payment instruments
http://www.bostonfed.org/economic/cprc/presentations/2012/Schuh06062012.pdf



Link

to discussion paper
http://www.bostonfed.org/economic/ppdp/2012/ppdp1206.htm



Federal Reserve Banks of Chicago and Philadelphia: joint article on the
efficiency and integrity of payment card systems
In order t
o examine the adequacy of existing efforts to prevent, manage and mitigate
data breaches and other fraud in card-based payment systems, the authors of this
article conducted 17 interviews with various payment industry participants in 2009. This
article documents the insights gained from those interviews: the need for greater
cooperation, the need to share relevant information, and the need for innovation in
order to stay ahead of the criminals (who are perpetrating payment card fraud by
increasingly sophisticated
means)
.

 Link
to article published in “Economic Perspectives” (Federal Reserve Bank of Chicago)
http://www.chicagofed.org/webpages/publications/economic_perspectives/2012/4q_cheney_etal.cfm

 Link
to discussion paper published by the Payment Cards Center (Federal Reserve Bank of Philadelphia)
http://www.philadelphiafed.org/consumer-credit-and-payments/payment-cards-center/publications/discussion-
papers/2012/D
-
2012
-
Efficiency
-
and
-
Integrity
-
of
-
Payment
-
Card
-
Systems.pdf



Federal Reserve Bank of Richmond: paper on ad valorem card fees
A
ccording to a working paper published by the Fe
deral Reserve Bank of Richmond i
n

November, price discrimination by payment card networks maximises profits for the
companies involved, while also improving social welfare. The authors investigate the
use of linear ad valorem fees – fees that increase in proportion to the sale price –
charged by card schemes such as Visa and MasterCard. The paper finds that allowing
ad valorem fees increases social welfare – both when the platform is regulated to
recover costs and when the platform is unregulated – relative to the prohibition of such
fees.




Link

to paper

http://www.richmondfed.org/publicatio
ns/research/working_papers/2012/pdf/wp12
-
08.pdf








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Blog: “Mobile money for development”
John Owens
has set up

this blog to share
his
experiences and observations
regarding

the ways in which
the
use of
mobile money can be
fostered

around the world.



Link
to blog
http://mobilemoneyfordevelopment.wordpress.com/



Bitcoin: paper on quantitative usage
A paper by two mathematicians
en
titled

Quantitative Analysis of the Full Bitcoin
Transaction Graph” has found that more than three-quarters of the digital coins in the
Bitcoin digital currency scheme do not circulate, instead remaining dormant in user
accounts and never being used in transactions. In addition, that paper also found that
almost all large Bitcoin transactions stem from a single payment made in November
2010. The authors made that finding despite apparent attempts by the account holders
involved to
conceal

their actions.

 Link to paper http://eprint.iacr.org/2012/584.pdf

 Link to a related article
http://arstechnica.com/tech-policy/2012/10/78-percent-of-bitcoin-currency-stashed-under-
digital
-
mattress
-
study
-
finds/




World Payments Report 2012
Th
is

report is part of a series published annually by Capgemini, RBS and
the
EFMA.

It
offers, among other things, detailed analysis of the impact of key global regulatory
initiatives and
categorisation

of

i
nnovation value spaces

.



Link

to
report
http://www.
de.capgemini.com/insights/publikationen/world
-
payments
-
report
-
2012/







Recent speeches on European retail payments by ECB Executive Board member
Benoît Coeuré
On 15 November Beno
î
t Coeuré spoke at a conference for central bankers in Budapest
on the subject of “the euro as a trusted means of payment”. He conveyed two
messages. First, that properly functioning large-value and retail payment systems are
essential, so it is in the interests of public authorities and central banks to ensure their
resilience. Indeed, they have an obligation to ensure the resilience of such systems.
And second, given the social and private costs of retail payments, that authorities
should not only focus on the smooth functioning of payment systems, but also keep a
close eye on their efficiency. Increased harmonisation and integration in the retail
payment market could be a catalyst for greater efficiency.
Mr Coeuré also spoke at the off-site meeting of the European Payments Council (EPC)
in La Hulpe on 21 November, the subject of his address being “SEPA migration,
innovation and change”. He reported that new players were entering the market for
retail payment services and offering attractive propositions to end users (especially as
regards “innovative” payments, such as m-payments and web-based payments), which
would require the banks to act soon if they wanted to play an active role in this area in
the future. He said that the EPC’s position would need to be adapted in light of the
ongoing review of SEPA governance

and that

t
he EPC
would
certainly
be in a good

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Sibos 2012 in Osaka
The Eurosystem
had its

own stand
at t
he 2012 Sibos exhibition
and organised several
sessions. In the area of retail payments, a leaflet entitled “SEPA migration key facts”
was distributed and participants were shown a short presentation entitled “SEPA in a
nutshell”. The 2012 version of the SEPA video was also presented. That video is now
available in
22

official EU languages.


 Link to Sibos 2012 website http://sibosexhibitionoffice.com/CompanyDetail.aspx?navtab=tab3&id=725

 Link to SEPA leaflet http://www.ecb.europa.eu/paym/sepa/pdf/sepa_migration.pdf

 Link to presentation http://www.ecb.europa.eu/paym/sepa/pdf/SIBOS_2012_SEPA_in_a_nutshell.pdf

 Link
to SEPA video in 22 languages
http://www.youtube.com/playlist?list=PLnVAEZuF9FZkzSHOWroJKoolA8AULE3c
-



Federal Reserve Bank of Philadelphia: government use of the payment card
system
A

paper
published in July 2012
summari
s
es
co
ntributions to
a conference held
in

July

2011 on the reasons why the public sector has adopted payment card solutions, the
benefits that have resulted, and the challenges that
need to

be
overcome
.

 Link to conference summary
http://www.philadelphiafed.org/consumer-credit-and-payments/payment-cards-
center/publications/conference-summaries/2012/C-2012-Government-Use-of-the-Payment-Card-System.pdf







This edition of the eSEPA Newsletter was compiled with the help of Ann Börestam, Henk
Esselink, Susan Germain de Urday, Monika Hartmann, Monika Hempel, Iddo de Jong,
Thomas Lammer, Rui Pimentel, Wiebe Ruttenberg, Francisco Tur Hartmann and Jan
Vermeulen.




The eSEPA Newsletter is prepared by the Market Integration Division of the European
Central Bank. If you have any comments or suggestions for the next newsletter, please
submit them to esepa*ecb.int (please replace “*” with “@”).
While we will be most grateful for any contributions you might wish to make, we cannot
always guarantee that all the information you provide will be included in the newsletter.
The names of all contributors will be visible on the ECB’s website, so if you would prefer
your name not to appear, please make a specific request to this end when submitting
your contribution.
position to continue contributing to the work of the SEPA Council, representing the
European banking sector in the area of retail payments.


Link

to speech in Budapest
http://www.ecb.europa.eu/press/key/date/2012/html/sp121115_2.en.html




Link

to speech in La Hulpe
http://www.ecb.europa.eu/press/key/date/2012/html/sp121121.en.html


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This regular newsletter series is published on the ECB’s website
. It is also sent to
subscribers by e-mail. If you wish to be added to the e-mail distribution list, please send
a brief request, together with your e-mail address, to esepa*ecb.int (please replace “*”
with “@”). Similarly, if you wish to unsubscribe, please send a brief message to the same
e-mail address. The ECB will use your e-mail address only to send the eSEPA
Newsletter to you. For more details on our data protection policy, please refer to the
ECB’s website.





The eSEPA Newsletter aims to provide non-exhaustive up-to-date information on retail
payment systems and services, payment innovations and payment regulation for SEPA
and beyond. No contribution, opinion, report or recommendation may be deemed to
engage the ECB or, where applicable, any contributor, unless specifically indicated.
Thus, neither the ECB nor the contributors shall: provide any warranty, expressed or
implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any
purpose of any information contained in the documents; assume any liability for any
damage or loss, in contract, warranty, tort or otherwise, incurred in connection with any
information contained in this newsletter; or endorse or accept any liability for the content
or use of linked websites. The contents of this newsletter are for information purposes
only and are subject to change without notice.


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