payments stream - regulation and mandatory changes
TRANSCRIPT
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) regulator’s policy objectives
• Growth and Jobs
• Overall efficiency
• Internal market for citizens
• eGovernment
• Global competitiveness
• Innovation through open competition
• Citizen’s 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
Consumer’s
account
Bank A
Consumer’s
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 OTC's
Dodd-Frank Act Living
Wills
EU
Banking
Union
Basel III /
CRD IV
Leverage
ratio
LCR
CVA
Fundamental
Review of the
Trading Book
Recovery and
Resolution Directive,
RRD
& our customers
Long-term
Financing
Transparency
Directive
Review
NSFR
SSM
SRM
Deposit
guarantee
SEPA
End-date
Payments
Package, PSD II
Volcker
FATCA Prospectus
Directive
Supplement
Coherence of
legislation
Other actors
• Financial Institutions
• Channel & product functionality
• Processors
• Organisations
• Financial organisations like European Banking Federations, Savings
Banks, Co-Op Banks
• Trade & Industry organisations
• Standardisation bodies
• ISO, Common Global Implementations (CGI), EPC etc.
• ERP Vendors
23
Our customers view of European payment services ?
24
Lack of flexibility
Complexity
25
All banks support and assist their customers on their way into
the European unknown market, by . . .
• Having a good product offering that will support the
customers requirements
• Making the products simpler for their customers by e.g.
using ‘conversion products’
• Moving towards CGI offerings in order to support also non-
euro based products
• Ensure to coordinate with ERP vendors and guide them
when needed
26
And the future . . .
We are now all moving fast into a more common use of ISO
20022 XML in all countries – mainly driven by the SEPA
initiative for euro
This also the case for ERP Vendors and will therefore benefit
our corporate customers
Will we have a fully harmonised payment market in Europe?
Not in the foreseeable future, but
some of the players in the future ‘payment’ market will have a
very different profile compared to those seen today
