Page 58 - Pay Magazine

56
Government watch
WINDS OF
CHANGE
What the U.S. Can Learn
from the EU’s E-Money Licensing Experience
It’s often said the winds of payments innovation blow west to east: What’s new in the U.S. will hit the U.K. and Europe a few years later. But, with London going head to head with New York and Silicon Valley as the
heart of ntech, perhaps there’s a thing or two the Old World has to teach the New World—particularly when it comes to creating a regulatory environment that sup- ports nancial innovation, while protecting consumers and the safety and soundness of the nancial system.
Last December, the O ce of the Comptroller of the Currency, the U.S. agency that regulates federally chartered banks and savings associations, issued a white paper summarizing its work in conceptualizing
a special purpose national bank charter for ntech companies. The paper, which some call a preliminary proposal, explores the public policy value of pulling ntechs clearly within a system of ongoing supervision and regulation. It also makes clear that ntechs receiv- ing a special purpose national banking charter would be held to the “same high standards of safety and sound- ness, fair access and fair treatment of customers that
all federally chartered institutions must meet.”
In concept, at least, the white paper conjures up similarities with e-money licensing in the 27-member- state European Union—i.e., enabling ntechs to conduct business in multiple jurisdictions (in Europe, those jurisdictions are countries; in the U.S., states) under a single license or charter. Since 2000,
EU member states have issued approximately
200 e-money licenses for businesses to participate in specialty payments services such as mobile wallets and prepaid cards. (To put a face on e-money, Face- book was granted a license late last year by the Central Bank of Ireland.) By almost all accounts, e-money licensing has been an out-and-out success for ntechs and consumers.
So, with15 years’ experience under its belt, can Europe teach the U.S. how to make the bene ts of ntech more accessible, while creating great services and protec- tions for consumers? To nd out, Paybefore spoke with two London-based payments experts: Craig James, CEO of compliance consultancy Neopay, and Robert Courtneidge, global head of Locke Lord LLP’s cards and payments group.