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ACM: ‘Give fintechs room to innovate on the payment system’

19-12-2017

The Netherlands Authority for Consumers and Markets (ACM) will be keeping a close watch on whether or not banks grant providers of new payment products access to payment information. The reason is that ACM believes there is a genuine risk of new providers in the payment market becoming excluded. This has been one of the findings in an ACM study into the position of new providers in the financial sector, so-called ‘fintechs’, in the payment system. Cateautje Hijmans van den Bergh, Member of the Board of ACM, adds: ‘It is good that new European rules offer new providers in the financial sector the opportunity to enter the payment system. Competition is the driving force behind innovation, and it leads to new and better products and services for consumers.’

European directive makes more competition in the payment system possible

In January 2018, a new European payment directive will come into force, the Revised Directive on Payment Services. This directive enables other providers besides banks to gain access to payment information if customers give their consent. For example, it will allow fintechs to enter the payment market with a mobile-payment app. This will boost competition in the payment system, which, as of yet, has been limited to only a handful of competitors. However, in order to be able to enter the market, fintechs will need to have access to the payment information of customers.

Offer more clarity about the conditions for access to bank accounts

ACM argues creating more clarity about the exact conditions under which banks must grant access. This will further reduce the risk of exclusion. The regulators that are able to play a role in such a process are ACM, the Dutch central bank (DNB), and the Dutch Data Protection Authority (AP). The European Commission recently decided to allow access through channels designed by the banks themselves only. With that decision, it becomes even more critical that such access is properly regulated.

Make entry by fintechs easier

ACM also recommends introducing a simpler banking license for fintechs, which is in line with the wishes of the current Dutch cabinet. With a banking license, fintechs are able to offer payment accounts themselves, and to gain direct access to the underlying payment systems of the Dutch central bank. ACM believes that this option is of great importance to fintechs in order to be able to offer a truly competitive product.