Brussels, 11/01/2012 (Agence Europe) - On 11 January 2012, the European Commission launched a Green Paper consultation exercise that will run until 11 April 2012 on remote payments online using bank cards or mobile phones in the EU with a view to identifying obstacles to cross-border electronic payments, which only account for 3.4% of trade in the EU at the moment. Online shopping and payments are alive and kicking in some member states, like the United Kingdom, France and Germany, but EU Commissioner Michel Barnier said that it was finding it difficult to cross borders because there are too many barriers that prevent economic operators providing services in other countries and there is also the question of whether consumers trust online payments to be safe, including ensuring the confidentiality of personal information and bank account and bank card details.
The Green Paper consultation aims to deal with the question of consumer confidence at a time when internet payments could increasingly play an ever greater role. The Commission explains that research indicates that the number of people doing online shopping could potentially increase from 141 million in the EU in 2009 to 190 million by 2014 and the annual growth rate of e-commerce in terms of scale is expected to be 10% over the next five years, but mistrust of payment systems is one of the main barriers to growth.
The EU credit and debit card market is far from integrated and there has been little tangible progress, explains the Commission. The high increase in the volume of card payments over the past decade and the cost savings to operators have not been passed on in any significant manner to the consumer or in terms of a reduction in the charges for retailers using payment card systems. Debit card payments are often simply not accepted in other countries, even within the EU.
Payments by mobile phone are the fastest growing area of remote payments in the EU, but Europe lags far behind the United States, Japan and South Korea. Some estimates suggest that in 2010, there were barely 7.1 million users of mobile phone payment systems in Western Europe, compared with 62.8 million in the Asia and Pacific region because of the huge fragmentation of the market in Europe and a lack of interoperable systems, explains the Commission.
For all three areas, the Green Paper sets out five areas of discussion - access to and entry to the market for existing and new suppliers; payment security and confidentiality; transparency of payment systems charges; technical standards and interoperability for service suppliers.
On access to the market, the Commission looks at how interbank and interchange charges vary from one country to another. On the transparency of charges, which is particularly crucial for debit and credit cards, the Commission is looking to see whether retailers should be forced to tell consumers how much it costs to use the various payment options. Should payment systems operators be forced to tell consumers how much they charge the retailer? The Commission will unveil separate legislation in 2012 on bank charges to retail customers.
In terms of payment security online and remote payments in general, the Commission asks whether new safety standards are needed (like checking two forms of ID and the use of secure payment protocols). The Green Paper asks what the best way of protecting personal information is and of meeting the legal and technical safety standards set out in EU rules. In addition, the Green Paper asks more general questions about governance of the SEPA. Should the EU take a more active role in SEPA governance and have a greater surveillance and regulatory role through the ECB, the Commission or the European Banking Authority? The Commission wonders whether the EU institutions and other state players should have a greater role to help reassure consumers, or whether it would be more effective to leave integration to the market. (SP/transl.fl)