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Global Payments Newsletter, December 2021 | JD Supra


In this Newsletter:

For previous editions of the Global Payments Newsletter, please visit our Financial Services practice page.

Regulatory Developments

Brazil: Open Banking moves into its fourth stage

It is expected that the implementation of the next, fourth stage of Open Banking in Brazil will begin on 15 December 2021.

The first phase of the program took effect in February 2021, opening service channels to consumers. The second phase of the program, which took effect in August 2021, involved the sharing of customers’ registration and transactional data, with their prior consent. The third phase of the program started at the end of October 2021, and involved facilitating sharing payment transactions between participating institutions, and introducing a system allowing for credit transaction proposals to be shared amongst financial institutions and correspondents in Brazil.

The fourth phase will provide for the exchange of information about foreign exchange, investments, pension plans and insurance services. Additional phases are expected in the first half of 2022.

For more information on this development, take a look at this Engage article by members of Hogan Lovells’ São Paulo office.

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United Kingdom: FCA publishes policy statement on changes to SCA RTS, Payment Services Approach Document and PERG

On 29 November 2021, the FCA published a policy statement (PS21/19) on changes to its (i) on-shored Regulatory Technical Standards on strong customer authentication (SCA-RTS), (ii) Payment Services and Electronic Money Approach Document and (iii) Perimeter Guidance Manual (PERG). A revised version of the Approach Document was also published.

Many of the changes are as originally proposed in the consultation paper published in January 2021. However, the FCA has refined its views on some issues including moving away from the EBA’s position on some issues.

The key changes to the SCA-RTS are that:

  • The FCA has confirmed that there will be an additional exemption from SCA for an Account Information Service Provider’s (AISP) access to a customer’s account balance and 90 day transaction history as long as SCA is used for the first access. The AISP must still confirm the customer’s explicit consent every 90 days.  Unlike the proposals currently being considered in the EU, use of the exemption will be optional for Account Servicing Payment Service Providers (ASPSPs) but the FCA strongly encourages them to apply the exemption as soon as possible.
  • ASPSPs are required to provide a dedicated interface for certain payment accounts.  The range of accounts and the providers who are excluded are the same as those set out in the consultation, with ASPSPs given until 26 May 2023 to implement the changes.

The changes to the Approach Document include:

  • Amendments to reflect changes resulting from Brexit and the onshoring process, and also to explain how the regulations, rules and guidance apply to firms within the Temporary Permissions Regime (TPR) or Supervised Run-off Regime (SRO).
  • The FCA has revised its view on what can constitute inherence. The FCA has now clarified that it thinks that inherence can be defined as a characteristic attributable to a person regardless of whether it relates to a physical property of the body.  As a result, it can include a behavioural characteristic such as shopping patterns.

The majority of these changes are effective from 30 November 2021, but for some requirements there is a longer lead in time. For example, firms will have until May 2023 to implement the requirement to have dedicated interfaces for some accounts, while the new exemption for AIS access will be available from 26 March 2022.

For more information on this development, take a look at this Engage article by members of Hogan Lovells’ London office.

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European Union: European Commission issues call for advice on PSD2 review to EBA

On 18 November 2021, the EBA published a call for advice which it had received from the European Commission regarding the review of PSD2 that is currently underway. The objective of the call for advice is to gather evidence on the application and impact of PSD2, including any benefits and challenges that may have arisen in areas including the following:

  • Scope and definitions: whether there are any issues with any of the definitions in PSD2, or business models or services not in scope that should be included?
  • Licensing of payment institutions (PIs) and supervision of payment service providers under PSD2: whether the EBA sees a need to change the PSD2 prudential requirements or a need to allow for more proportionality?
  • Transparency of conditions and information requirements: whether the EBA has identified any need for clarification or amendments of specific provisions in PSD2 on the application of the requirements for transparency of conditions and information requirements?
  • Rights and obligations: whether the EBA has identified any issues with respect to payment transactions where the transaction amount is not known in advance and funds are blocked?
  • Strong customer authentication (SCA): whether the EBA has identified any need to clarify or amend specific provisions in PSD2 related to the application of SCA, or identified any security risks not currently addressed by PSD2? In addition, whether the EBA has identified any unintended consequences of the current rules?
  • Access to and use of payment accounts data in relation to payment initiation services and account information services: whether the EBA has identified impediments in terms of access to and use of payment account data?
  • Access to payment systems and access to accounts maintained with a credit institution: whether the EBA has identified any impediments to the ability of payment institutions and electronic money institutions to access payment systems, and/or payment accounts held by credit institutions, in a way that would undermine the competition enhancing objective of PSD2?
  • Enforcement of PSD2: whether the EBA has identified any shortcomings in the enforcement by the National Competent Authorities of PSD2 rules? In addition, whether the EBA has identified any specific issues in the interplay between PSD2 and other European Regulations and Directives (GDPR, WTR, AMLD, SFD) and forthcoming legal acts (DORA, MiCA)?

The EBA is requested to deliver its response to the European Commission by 30 June 2022.

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European Union: European Commissioner for Financial Services gives payments speech

On 16 November 2021, the European Commission published a speech given by Mairead McGuinness, the European Commissioner for Financial Services, Financial Stability and Capital Markets Union. The speech took place at the European Payment Institutions Federation Annual Conference, and discusses EU developments in payments.

In the speech, the Commissioner started by identifying the key trends in payments. New technology has rendered…



Read More : Global Payments Newsletter, December 2021 | JD Supra

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