Page 60 - Pay Magazine

Government watch
Winds of Change
CJ: The Financial Conduct Author- ity, the regulator with jurisdiction in the U.K., has, by law, up to 12 months to deny or approve an e-money license application.
In practice, the timing is three to six months. We’ve recently acquired two licenses for clients in just ve weeks, which is a record.
The point is, there’s a clear and transparent process in the U.K., and our regulator is well-respected, which is why more e-money li- censes are issued in the U.K. than anywhere else in Europe.
If you’re a credible business, re- spect the requirements and follow the process, you’ll be licensed. We’ve been working with clients for nine years, and we have a 100 percent success rate getting our clients licensed.
Paybefore: At this point, shouldn’t the demand for e-money licenses be winding down?
CJ: Surprisingly, the demand for e-money licenses hasn’t yet trailed o . Some early adopters with faulty
business models have dropped
out or were consolidated, creating space for new entrants. And, technology and regulatory changes open up new opportunities and new niches all the time. Lastly,
as ntechs grow, they realize the bene t of having their own licenses to reduce their costs and control their own payments. When they explore their options of a full banking license or an e-money license, the e-money license looks very attractive.
Paybefore: Has e-money licensing been e ective?
CJ: Absolutely, massively! E-money has fostered payments innovation, created a hugely competitive en- vironment and slashed the cost
of transacting for consumers. Fintechs are much more adept at providing consumers with what they need. In contrast, innovation for mainstream banks is massively expensive and a reputational night- mare, so there’s little incentive
for them to get their hands dirty. As a result, the market has moved. You can’t turn back the clock.
RC: I’ll add three bene ts of
my own: Safeguarding consum- ers’ funds with rules to ring fence those funds to protect consumers in the event of the EMI’s insolven- cy; expanding access to people who were shut out of the main- stream nancial system—what you call the un- and underbanked —and enabling them to transact online; and educating youth about how to be responsible users of nancial services.
Paybefore: The last surprises me.
RC: In Europe, there’s less of a direct connection between paying with a card and extending credit, so we don’t necessarily have the American hang-up that giving a child a card introduces him to a life of credit card debt. We see youth products as a step to equip young people to thrive in the high-tech world and to understand and use the payments system responsibly.
Paybefore: Looking back, if you had the chance to rewrite the rules that enable e-money, is there anything you’d change?
58