The European Commission has introduced reforms to the regulations governing the electronic payments sector, among them, mitigating fraud by enabling payment service providers to share information. It is occurring at a time when the fintech ecosystem is growing.

The reforms also include the revised Payment Services Directive which provides measures to extend the refund rights for consumers who fall victim to fraud, the Commission said in a statement.

On top of that, the commission is planning to allow non-banks payment service providers access to all EU payment systems. That way, the new set of rules will create a level playing field for banks and non-banks alike. Moreover, the measure is expected to provide appropriate safeguards to non-bank providers and to secure their rights to a bank account.

Open Banking

Also included in the commission's set of reforms for electronic payments is the enhancements to open banking, which has been at the centre of these discussions in the UK's fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term sector most recently. Open banking provides a way for consumers and businesses to securely share their payment account details with regulated third parties and receive customized services, such as lending or payments.

Under the new reforms, the European Commission plans to address the remaining issues before the rollout of the open banking initiative. Finance Magnates reported this month that the Joint Regulatory Oversight Committee (JROC), which is co-chaired by the Financial Conduct Authority (FCA) and the Payments Systems Regulator (PSR), has set dedicated workstreams for the rollout of open banking.

"In practice, this proposal will lead to more innovative financial products and services for users, and it will stimulate competition in the financial sector," the Commission announced in a statement. "Previously burdensome processes such as comparison of services of switching to a new product will become smoother and cheaper."

Besides that, the new reforms aim to improve the availability of cash in shops and through ATMs. In the plan, retailers will be allowed to offer cash services to consumers. One of the benefits the Commission aims to achieve through this includes promoting innovation in the financial services sector.

Opening Payments Markets

The package of the European Commission's reforms arrives when the market is shifting away from the dominance of large banks and popular payments platforms like Visa and Mastercard. The Commission's data shows that the EU's electronic payments reached €240 trillion in 2021 compared to €184 trillion in 2017. The figure was partly boosted by the Covid-19 pandemic.

Meanwhile, the European Union (EU) has agreed on new regulations for digital assets that could impose restrictions on banks' investments in the sector. The step is in response to calls by EU legislators to prevent speculative digital assets from entering the traditional banking sector.

According to the agreement, which is the product of a meeting between the negotiators of the EU Council, the Parliament, and the Commission, banks will be required to disclose their risks related to cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. Furthermore, the EU legislators agreed on setting capital requirements for banks' exposure to cryptocurrencies.

Although the new changes proposed a favourable stance on stablecoins, free-floating cryptocurrencies or digital assets driven by demand and supply were assigned higher risk weights, according to the preliminary details of the legislation.

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