9.1 The existing framework for payments and retail payment services
is based upon national rules, which differ widely across the EU.
The Commission's Communication is a consultation document seeking
views on the scope of a "New Legal Framework for Payments
in the Internal Market" creating a "Single Payment Area",
for which it plans to propose legislation as part of the Financial
Services Action Plan.
9.2 When we re-considered this document earlier this
month we asked for information about the outcome of the Government's
consultation on this matter with key stakeholders.
9.3 The Financial Secretary to the Treasury (Ruth
Kelly) now writes with that information. She says:
"HM Treasury hosted a roundtable on 9 January
2004 to discuss the Commission's proposals contained in the New
Legal Framework. The roundtable was attended by representatives
from banks, e-money issuers, mobile network operators, card schemes,
consumer organisations and regulators.[15]
"HM Treasury also held a comprehensive series
of bilateral meetings with stakeholders and other government departments.
We met:
— DTI [Department of Trade and Industry]
to discuss digital signatures, the evaluation of the security
of payment instruments and components and the proposal to extend
joint liability to payment providers for distance and online commerce;
— FSA [Financial Services Authority] on
an ongoing basis to discuss the Communication in its entirety
as well as seeking specific advice on e-money and alternative
dispute resolution;
— Bank of England on an ongoing basis
to discuss the Communication in its entirety;
— APACS [Association for Payment Clearance
Services] on an ongoing basis to consult on the current state
of play in the UK banking industry, discuss the potential effect
of the Commission's proposals;
— British Bankers' Association to discuss
FATF [Financial Action Task Force on Money Laundering] Special
Recommendation VII and the Commission's proposals to implement
it at Community level;
— Financial Ombudsman Service to discuss
alternative dispute resolution and how the Communication could
impact upon existing ADR [Alternative Dispute Resolution] structures
in the UK;
— Information Commissioner's Office to
discuss data protection implications;
— Electronic Money Association to discuss
the potential impact of the Communication on e-money issuers;
and
— Consumers' Association to consider the
impact the New Legal Framework could have on consumers.
"The outcome of these meetings is clearly reflected
in the response we submitted to the Commission, as they informed
us as to the views and concerns of UK stakeholders. In particular
meetings with industry informed us of:
— The problems applying full originator
information to batch transfers would cause (annex 8 [of the Commission
Communication]);
— How value dates are used competitively
in the UK and hence the Commission's proposal to harmonise them
would reduce consumer choice (annex 4);
— How harmonising the point at which a
payment is no longer revocable would lead to a standardisation
of payment products and hence a reduction in competition and consumer
choice, as well as undermining confidence in the finality of the
payment (annex 10);
— How imposing liability on payment providers
in the event of non-delivery or defective delivery of goods bought
online would make payment providers liable for a product or service
over which they had no control and place high burdens upon payment
providers (annex 11);
— How UK consumers benefit from the receipt
of good quality information regarding their payments transactions
which is determined on a voluntary basis in the UK, as opposed
to the exhaustive lists proposed by the Commission (annex 2);
[and]
— How the introduction of a third category
of licence that involves prudential regulation could drive many
money transmitters into the unregulated sector (annex 1).
"We are still meeting with stakeholders on a
regular basis and expect to increase such contacts once the Commission
publish a legislative proposal."
