De instelling voor elektronisch geld Wat staat ons te wachten ? 11 Juni 2002.

De instelling voor elektronisch geld

Wat staat ons te wachten?

11 Juni 2002

11 Juni 2002 De instelling voor elektronisch geld © S. Lelieveldt Consultancy


Programme

Welcome Market and regulatory developments E-money in the UK: suggestions

Tea break / Thee pauze Toelichting op Nederlandse wetgeving Wetgeving in de praktijk Vereniging 1.1a2

Market and regulatory developments

How did we get here?

11 Juni 2002


Outline

Introduction How did we get here? Main players Chronological overview of developments Some remarks


Introduction

Business Administration (1989) Postbank (1990-1995) De Nederlandsche Bank (1995 - june 2001) S. Lelieveldt Consultancy (july 2001 - )

– research ePSO project European Commission– report with Electronic Commerce Platform– workshops NIBE/SVV on e-payments– consultancy (e-Back, Privver etc)


How did we get here?

Legislation on e-money as a result of interaction between:

market developments:– chipcard, internet-money, mobile telephony

and regulatory responses:– local regulators, European Central Bank,

European Commission


Main players

Large retailers (Shell, Ahold, Telco) Postbank (former postal giro) Bankgiro banks (ABN AMRO, RABO) Small and foreign players (Danmønt, Mondex,

Primeur, Digicash) De Nederlandsche Bank (central bank) Ministries of Finance and of Economic Affairs,

Ministry of Transport, EC, ECB


Chronological overview - POS

1985: Shell threatens with own card-system 1987: joint POS-system of Dutch banks 1988: authorities leave it to the market 1988: chipcard-initiative small retailers 1989: joint chipcard pilot banks/retailers 1991: chipcard-pilot ended succesfully 1991: Albert Heijn supports POS -> success


Chronological overview - 2

1993-1994: market initiatives – Primeur Card (smaller retailers, chip)

– KPN with phone card + – Proton, Mondex: foreign purse-systems– Digicash with e-cash

Concern for banks and regulators



1994-1995: first reactions– Banks start joint chipcard pilot, based on Proton – DNB initiates EMI report on electronic money

• loading is actually ‘attracting deposits’• e-money issuance needs to be supervised

– Statement by working group of public authorities: e-money requires supervision (note: Ministry of Economic Affairs disagrees)



Eind 1995-1997: further developments Postbank and KPN Telecom develop and roll

out Chipper while other banks roll out Chipknip

Joint banks develop I-pay (after digiclash) Regulators study/consider their roles

– BIS-, G-10 and ECB studies on e-money– possible EU directive on e-money



1998-1999 Chipcard war ends;rules appear– retailer loyalty cards met chip (Edah etc)

– interoperable Chipper/Chipknip terminals– risk management for electronic banking (BCBS)

– report on electronic money (ECB) • e-money issuers need to be a bank !

– Dutch Competition authority set up



2000: steady progress– Chipcard use slowly increases – Shell pilots Easypay payment product – Postbank sells Chipper (international)– Directives on e-money finalised

• supervision necessary

• issuing organisation not necessarily a bank

• lighter regime of supervision envisaged



2001: chip moves, mobile payment starts – Pre-paid chip-only card for parking/vending– Postbank - Telfort trial M-payments– Nedap pilot mobilepay at as station (GSM)

– Tripper-pas Groningen (proximity)– Increasing number of interventions on NL and

EU-level – Start of work on implementation directives



2002: chip works, more intervention – Chipcards take off – A number of mobile initiatives ahead – Investigation ‘pinnen’ (Nma)– Investigation Wellink (DNB)– Investigation entry barriers and switching costs

(Ministeries of Finance and Economic Affairs) – Draft supervisory legislation and rules


Conclusion

Legislation on e-money is the result of market developments and response by regulators

The challenge is now to allow innovation and competition under an ‘old’ regulatory framework


Some remarks - 1

Market– Banks respond swiftly to external threats

(chipknip, I-pay)– Large users come up with dedicated systems– New m-payments (incl internet use) arrive

Dutch regulators – Speedy implementation (definitions…)– Late consultation of the market


Some remarks - 2

Differences with the UK:– UK had no specific regulation in place before

EMI-directives; in NL Act on Supervision ‘applied’ ; -> different starting point for a representative organisation

– UK regulators tend to consult market in time

De instelling voor elektronisch geld Wat staat ons te wachten ? 11 Juni 2002.

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