The Smart Payment Association said last week that the new draft of the payment service directive significantly restructures retail payments regulation.
The PSD2 aims to increase retail payments market competition and assure European citizens of a reinforced legal system designed with consumer protections.
“SPA therefore welcomes the legal support the Directive offers to electronic payments initiated with personal devices and adapted to open networks,” the SPA said on Wednesday.
The SPA said that, despite its neutrality in the technology sector, “there remains a strong need to support the European industry in its effort to promote the smart card.”
“It is smart card technology that enables payments interoperability, alongside the highest levels of standards-based security and payer convenience,” the SPA said. “In addition, because smart cards are marketed in different hardware form factors adapted to different devices, they allow traditional bank card payments to be securely and conveniently extended to other channels – including mobile and internet open networks.”
Additionally, the SPA said smart card-based technology provides security advantages compared to cloud-based alternatives.
“SPA believes the new release of the PSD will have a major impact on the retail financial services industry for years to come: not least because the Directive extends regulatory framework to cover new legal entities seeking to provide payment services,” the SPA said. “We share the view that trust in the SEPA retail payment systems can only be achieved if all the players participating in the payment value chain are properly regulated – and that no gaps are apparent.”
The SPA also said, however, that it is important to “warn of the potential conflict in the provision and requirement of future laws relating to retail payment systems.” The organization added that it considers that “additional insight and investigation is required in order to better understand how technology may offer a harmonized and standardized technical solution.”