Bond Pearce

European sources claiming to have reviewed the draft Green Paper suggest that mobile payment use in European markets are being limited by the strong fragmentation of the mobile payment market.  The m-payments market operators have not yet agreed on a viable business model for an EU-wide inter-operable payment solution, but are still controlling standards in a way that reduces access by competitors.  

These findings are consistent with the investigation into the standardisation process for internet payments put in place by the European Payments Council as part of its work on SEPA (the Single European Payments Area).  While the Commission supports SEPA and recognises the need for standardisation in promoting integration through inter-operability and competition, it has also emphasised that these standardised arrangements for e-payments should not be allowed to prevent innovation and lock out non-bank entrants to e-payments.  These kinds of restrictions limit the use of e-commerce cross-border.

Another issue flagged in the Commission's Green Paper is the security of online and mobile payment systems.  Sensitive customer information should stay within a secure payment infrastructure, both in terms of processing and storing data, the EU executive believes. "It is crucial that authentication mechanisms for payment transactions comply with this and that the number of parties having access to authentication data during or after a payment transaction is minimised," the draft paper says.

The deadline for submitting contributions to the consultation will be 11 April 2012.