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By Huw Jones
LONDON Feb 21 The European Union's banking
watchdog has eased its proposed rules for increasing choice in
how people pay for products and services after the sector warned
of unfair competition.
The European Banking Authority Chairman Andrea Enria said
changes have been made to the watchdog's draft rules that flesh
out the bloc's revised payments services law from January 2018
to prise open a core part of banking to newcomers.
EBA startled the industry last year by proposing that only
payments of 10 euros ($10.54) or less would be exempt from
mandatory "strong authentification", such as the customer
tapping in a password or providing a fingerprint.
Enria told a conference on Tuesday this limit would be
increased to 30 euros.
Two new exemptions from "strong authentification" will also
be introduced for retailers with a low-fraud record for
payments, and for payments made at "unattended terminals" for
transport or parking fares.
"However, we disagreed with a number of comments that
suggested adding further exemptions, such as on corporate
payments," Enria told a Westminster Business Forum conference.
He said the watchdog has also made changes to ensure
"business model neutrality" after financial technology or
"fintech" firms and others said they would have difficulty
retrieving the data they need from a customer's bank account to
offer a rival payment service.
"The banks will be obliged to provide both the provider and
customers the same level of access," Enria said.
Consulting on what Enria called "major game-changing" rules
sparked the biggest response from industry that EBA has ever
seen, even surpassing reaction to the watchdog's curbs on banker
A far wider range of companies will be able to offer apps
that allow customers to make payments directly from their
account to a retailer without having to use cards issued by
Jeremy Light, managing director of payment services in
Europe for Accenture, a consultancy, said retailers will use
their reach and resources to offer more payment services.
"Consumers will have control of payments in their own hands,
while merchants can by-pass the card networks to avoid paying
fees to the card issuers," Light said.
"Tesco has already started this with PayQwiq, and in the
United States, some of the most successful mobile payments are
being driven by merchant apps, such as Starbucks."
The EBA is due to publish its "final" draft rules later this
week and the bloc's executive European Commission will have to
endorse the EBA rule before they come into force.
($1 = 0.9487 euros)
(Editing by Louise Heavens and Ed Osmond)