Observatory on epayment systems

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Observatory on e-payment systems
Electronic Payment Systems Observatory
ePSO First Steering Group Brussels, November
21, 2000
Bernard Clements
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Study on e-payment systems for EP EMAC Questions
Does the lack of a safe and widespread electronic
payment system hamper the growth of electronic
commerce? Will monetary union speed-up
cross-border electronic commerce within the EU
and world-wide? What are the costs of
non-standardisation of electronic payment
systems? Should markets or regulators impose
future standards if necessary for electronic
payment systems? How to regulate issuers of
electronic money? How will electronic money
affect monetary policy-making?
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ePSO Organisation
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IPTS Institute for Prospective Technological
Studies - DG JRC - Seville
Presentation of Strategic and Technical Issues
Knud Boehle, Malte Krueger
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Scope of the issues covered
Electronic retail payment systems
Non-electronic payment systems
E-commerce
B2B
Real world
Wholesale-payment systems
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Issues 1-4
Electronic payments infrastructure
Non-electronic payment systems
B2B
e-moneyproducts
access products
micropayment systems
Wholesale-payment systems
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Issues 5-8
Policy makers regulation and innovation
Standardization and interoperability
Electronic retail payment systems
E-commerce
Real world
Consumers consumer protection, privacy, security
...
Merchants integration in online transactions
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Purpose of the issues selected...

• The issues try to identify those topics where
  open debate, information exchange, knowledge of
  best (and mal) practices
• across groups of actors
• across sectors and
• across countries
• can lead to mutual learning processes, better
  understanding, and to co-operative efforts to
  enhance the efficiency of retail payments.

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E-Money Issues

• Still questionable whether there is a clear
  business case for e-purses
• in the virtual and in the real world.
• Do internet payments and multi-application
  smart cards enhance the
• business case?
• many payment alternatives on the internet and at
  the real POS
• low demand for cross-border retail payments in
  the real world
• multi-application smart cards less suitable for
  cross-border use
• Who owns the card?

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Enhanced Access Products

• Access products will benefit from cheaper and
  faster online
• connections and may prevail in the future.
• Integrated services such as home banking and
  bill presentment
• will influence the shape of future access
  products.
• The provision of integrated services will
  provide new business opportunities for banks.
  
• Eventually, there will be real-time clearing
  and settlement of
• retail payments.

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Micropayments

• There are many micropayment schemes (prepaid,
  post-paid,
• value points) but is there a large market for
  micropayments?
• subscriptions
• indirect income models
• free content
• What will be the role of non-banks in this
  market?
• Can value points develop into private
  currencies - challenging
• the current monetary order?

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Infrastructure

• To what extent will there be competition
  between networks?
• Mobile phones as an alternative access
  structure?
• Mobile phone operators as (inter-)national
  clearers?
• What will be the role of non-banks in
  e-payments?
• When does such co-operation become collusion -
  harming
• consumers and merchants?
• Will the difference between national and
  cross-border payments
• vanish within the EMU area?

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Regulation and Innovation e-money

• What will be the effect of the E-Money
  Directive on payment
• systems innovation?
• How does the directive affect the position of
  Europe in the
• global market for payment systems?
• To what extent is the directive applicable to
  loyalty schemes,
• barter schemes, etc.?
• How will the implementation process be shaped
  by different
• payment cultures?
• Alternative regulatory approaches

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Standardization and interoperability

• How large is the demand for cross-border
  interoperability?
• Economies of scale as an inducement to achieve
  interoperability?
• What will the migration paths to interoperable
  systems look like?
• The potential of bridging technologies.
• The role of CEPS.
• Interoperability of micropayment systems lack
  of European
• involvement?

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Consumer Protection, Anonymity, Privacy and
Security

• Trust, security and privacy are important - but
  how much are users
• willing to pay?
• scalability of security
• low-cost secure solutions
• PKI the way to go, but
• Is a world-wide PKI a realistic option?
• Who will control the PKI?
• Interoperability of different PKI schemes.
• Is there sufficient demand for a cash-like
  (person-to-person,
• anonymous) e-money scheme?

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Online Transaction Process

• What types of standards and frameworks are
  relevant for
• online transaction processes?
• Does the design of e-payment solutions have to
  take these
• standards and frameworks into account?
• To what extent do B2B standards influence B2C?
• If e-commerce moves towards either contractual
  two party or trusted
• third-party concepts - what would be the
  implications for e-payments?

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ePSO Next Steps

• Forum How to complete the list of experts to
  contact.
• Steering Group Calendar.
• 22/5/01 draft analysis/review report
• 18/9/01 final analysis/review report
• 20/11/01 consensus conference
• Background Papers to Come.
• Mobile payment systems, Innovative new payment
  systems