In this article, Emanuel van Praag discusses developments on the European and Dutch payment markets. The article describes technological and social developments in the field of paying that come with new risks. These risks are addressed by regulations, both at a European and a national level. The main risk and legislation procedures will be discussed.
The first development is the decreasing use of cash. This gives cause for concern about the availability and acceptance of cash. Vulnerable consumers are dependent on cash, and cash is an alternative if electronic payments are not working, for example due to a power outage. Regulations at EU level, such as the Regulation on the legal tender status of euro banknotes and coins, and the Dutch Euro notes and coins traffic act, intend to guarantee the availability of cash money.
The digital Euro was introduced as Central Bank Digital Currency (CBDC), also because the use of cash is on the decline. Cash is therefore less of an alternative to electronic money traffic. The digital Euro also serves geopolitical goals, like the reduction of dependency on non-EU payment systems and to prevent stablecoins or CBDCs from third countries gaining an important role on the European payment market.
Regulations such as the Accessibility Directive and the Payment Services Regulation (PSR) set requirements on the accessibility of digital means of payment for vulnerable consumers. In addition, new rules in the PSR extend liability for payment fraud and set additional requirements for fraud monitoring and exchange of information between payment service providers. All these measures impose considerable obligations on private parties like banks, to resolve social problems that were not caused by them. This is a new development in financial regulation, which gives rise to questions about freedom of entrepreneurship and the allocation of costs.
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