EU Unveils Sweeping Reforms to Drive Growth in Fintech Industry

<p>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 comes at a time the fintech ecosystem is growing. </p><p>The reforms also include the revised Payment Services Directive which provides measures to extend the refund rights for consumers who fall victim to fraud, <a href="https://www.financemagnates.com/tag/european-union/" target="_blank" rel="follow">the Commission</a> said in a statement.</p><p>The commission is also
planning to allow non-banks payment service providers to have 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 also expected to provide appropriate safeguards to non-bank providers and to secure their rights
to a bank account.</p><p>Open Banking</p><p>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 discussions in the UK's <a href="https://www.financemagnates.com/terms/f/fintech/">fintech</a> 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.</p><p>Under the new reforms,
the European Commission plans to address the remaining issues before the
rollout of the open banking initiative. <a href="https://www.financemagnates.com/">Finance Magnates</a> 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 <a href="https://www.financemagnates.com/fintech/uk-regulators-set-up-new-working-groups-to-expand-open-banking/" target="_blank" rel="follow">set
dedicated workstreams</a> for
the rollout of open banking. </p><p>"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 said in a statement. "Previously burdensome processes such as
comparison of services of switching to a new product will become smoother and
cheaper."</p><p>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 with this include promoting innovation
in the financial services sector. </p><p>Opening Payments Markets</p><p>The package of the
European Commission's reforms comes at a time 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.</p><p>Meanwhile, the European
Union (EU) <a href="https://www.financemagnates.com/cryptocurrency/eu-reaches-deal-on-crypto-bank-capital-rules/" target="_blank" rel="follow">has
agreed</a> on new
regulations for digital assets that could impose restrictions on banks' investment in the sector. The step is in response to calls by EU
legislators to prevent speculative digital assets from entering the traditional
banking sector. </p><p>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 <a href="https://www.financemagnates.com/terms/c/cryptocurrencies/">cryptocurrencies</a>. Furthermore, the EU legislators agreed on setting
capital requirements for banks' exposure to cryptocurrencies.</p><p>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.</p><p>Revolut slashes crypto fees; BitPay adds new payment options; <a href="https://www.financemagnates.com/forex/news-nuggets-28-june-revolut-slashes-crypto-fees-bitpay-adds-new-payment-options/" target="_blank" rel="follow">read today's news nuggets</a>.</p>

This article was written by Jared Kirui at www.financemagnates.com.