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Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?
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Mobile Payments Law - Lessons from around the world: Why are we behind some other countries and what can we do to catch?

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Presentations of Osborne Clarke's Paul Anning at Mobile Payments Law 2012 (15/16 November)

Presentations of Osborne Clarke's Paul Anning at Mobile Payments Law 2012 (15/16 November)

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  • Surprisingly, in one of Russia's largest cities a few large transportation companies have worked together to implement a system of payments that is compatible with all parties involved and it seems to be working well. Hopefully here in the US we can start to catch up to the rest of the world. Places like Japan are way ahead of us. Here is the Russian example... http://qfuse.com/blog/nfc-efficiency-and-markets/
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  1. Mobile Payments Law Lessons from around the World: Why are we behind some other countries and what can we do to catch up? November 15 & 16, 2012 - San Francisco, California
  2. osborneclarke.com Private & Confidential 2 Agenda • Mobile Payments • European regulatory regime • Case Studies referencing Osborne Clarke’s experience in Mobile Payments: 1. Everything Everywhere’s partnering arrangements with Barclaycard (the UK’s first commercial mobile contactless payment service) 2. Creation of a mobile commerce joint venture by UK mobile operators Everything Everywhere, Telefonica and Vodafone 3. Creating the UK’s Mobile Payments Service
  3. osborneclarke.com Private & Confidential 3 Mobile Payments – Models (1) Broad term covering different models: •Mobility (GPS; incentives) •Purchasing service ('add to bill') •Access/authentication ('remote payments' - mobile banking; money remittance) •Mobile phone as a payment instrument ('contactless – NFC: stickers, secure element provisioned)
  4. osborneclarke.com Private & Confidential 4 Mobile Payments – Models (2) Choices for mobile payments providers as regards the European payment services regulatory regime: •Stay outside it completely (airtime; mobile wallet) •Self-issuing ('prepaid') •Work within exemptions ('limited network'; mobile device) •Partner with a financial institution
  5. osborneclarke.com Private & Confidential 5 Mobile Payments – European regulatory regime: Objectives Regulated field of payment services Enhanced competition Greater efficiency Consumer protection Digital economy
  6. osborneclarke.com Private & Confidential 6 Mobile Payments – European regulatory regime: Objectives - Enhanced competition • Specific, lighter prudential regimes introduced for: – Payment Institutions (e.g. money remitters, non-bank acquirers) – Electronic Money Institutions (for issuers of e-money), with equal rights of access to payment systems • Competition (anti-trust) authorities targeting restrictive business rules and practices and problems of market access: – MIFs (Multilateral Interchange Fees), HACR (Honour All Cards Rule) and co- badging – 'closed shop' (bank dominated) standards setting bodies – banks as 'gateways' (providing access) to information on payment accounts
  7. osborneclarke.com Private & Confidential 7 Mobile Payments – European regulatory regime: Objectives - Greater efficiency • Shorter execution times - D+1 maximum execution time for electronic payments within Europe, no deductions, no 'float' (on receiving leg) and value dating prohibited (since 1 January 2012) • Electronic invoicing – proposal expected Q2 2013 to make this the standard invoicing mode for public procurement • Harmonising technical standards – mandated for euro denominated credit transfers and direct debits; mobile payments proposal expected Q2 2013
  8. osborneclarke.com Private & Confidential 8 Mobile Payments – European regulatory regime: Objectives - Digital economy • Technological neutrality of all European payment services legislation: – All payment types – All payment methods – Electronic payments only (not cash or cheques) • Mobile devices specifically contemplated • Standardisation, leading to greater interoperability
  9. osborneclarke.com Private & Confidential 9 Mobile Payments – European regulatory regime: Objectives - Consumer protection • Disclosure of information enabled informed choice ('durable medium') • (Re)allocation of rights and liabilities as between provider and user, including: – Liability for unauthorised use – Refund rights – Breakage (for e-money) • Security • Surcharging (and rebating) • Switching
  10. osborneclarke.com Private & Confidential 10 Everything Everywhere’s partnering arrangements with Barclaycard
  11. osborneclarke.com 11 EE/BC Partnering arrangements: structure Merchant acquirer Merchant Jasper customer Acquiring Agreement Sale of goods and/or services Credit Card Ts&Cs Card Scheme Rules Scheme waivers for Handset and SIM NFC capability TSM (Handset) (SIM) NFC enabled Handset Ts&Cs (including QuickTap Ts&Cs) Payment Account Ts&Cs Partnering AgreementTSM EMVCo MSA MSA
  12. osborneclarke.com 12 EE/BC Partnering arrangements: roles of the key players  Provision of NFC device, SIM and network  Management of MNO TSM  Single point Customer Care  Marketing & promotion  NFC Payment application  Management of Banking TSM  End to end solution & testing  Marketing & promotion  Scheme certification  EMVCo certification support  Technical advice  NFC SIM card  NFC application  Banking TSM for BarclayCard  NFC Device  Obtaining EMVCo certificate  MNO TSM for Orange Orange Multimedia Services
  13. osborneclarke.com Private & Confidential 13 EE/BC Partnering arrangements: Key features • A cast of many • An ‘open marriage’ • Brand hierarchies • Customer ownership • Technology challenges • Different regulatory regimes and sensitivities: – FS and Telecoms (eg security; lost and stolen; etc) – Data protection views – VAT
  14. osborneclarke.com Private & Confidential 14 Project Oscar • JV being created by 3 of the UK's largest MNOs: – Everything Everywhere, Telefonica UK and Vodafone UK • M-commerce solution integrating: – mobile advertising – data analytics – mobile payment applications supply ('mobile wallets') • Single platform and contact for advertisers, marketing partners, retailers and banks • In-depth EC competition authority's investigation undertaken during 2012 – clearance given
  15. osborneclarke.com Private & Confidential 1515 Project Oscar
  16. osborneclarke.com Private & Confidential 16 UK’s Mobile Payments Service • Developed by the UK's Payments Council • A ubiquitous mobile phone initiated P2P money transfer system • Uses mobile phone number as a proxy (central database) • Payments routes via existing near real time systems (Faster Payments and LINK) • MNO and handset independent • Simple customer registration • Allows interoperability and competitive service offerings • Available before end of 2012
  17. osborneclarke.com Private & Confidential 17 Mobile Payments - Key issues • What will drive consumer habits? Will consumer usage lead commercial adoption? • How can all the relevant stakeholders in these network industries combine? Is partnering the only way forward? • What will make the economics viable? How will the winners monetise the opportunity? Who will win the ‘wallet war’? • Is there sufficient standardisation? • Is NFC sufficiently robust? • Is data analytics the key service? • What can the regulators do to encourage competition and innovation?
  18. osborneclarke.com Private & Confidential 18 Further reading • Payment Services Directive http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32007L0064:EN:NOT • Electronic Money Directive http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0046:EN:NOT • European Commission’s Green Paper: Towards an integrated European market for card, internet and mobile payments http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52011DC0941:EN:NOT • ECB's Recommendations for the Security of Internet Payments http://www.ecb.int/pub/pdf/other/recommendationsforthesecurityofinternetpaymentsen.pdf • Single Market Act II http://ec.europa.eu/internal_market/smact/docs/single-market-act2_en.pdf • European Payments Council’s White Paper: Mobile Payments http://www.europeanpaymentscouncil.eu/knowledge_bank_detail.cfm?documents_id=564
  19. Private & Confidentialosborneclarke.com 19 Contact details Paul Anning is head of European law firm, Osborne Clarke's Financial Institutions Group and a specialist financial services lawyer. Paul has market leading experience and expertise in the payments industry where he has guided clients through new product development, regulatory change and transformational projects, such as the creation of the UK's Payments Council (which sets the strategy for UK payments), the merger creating VocaLink (the UK’s largest payments processor), the UK's first NFC enabled stored value mobile payment solution (QuickTap) and the acquisition of one of Europe's leading prepaid card issuers. Paul is well versed in the complexities of the payments industry's network arrangements. He also has a deep knowledge of legal and regulatory developments affecting the payments industry, including key European developments such as SEPA, PSD and the 2EMD. Paul and the Osborne Clarke Payments team act for a range of clients from infrastructure providers and traditional credit institutions and GTS businesses through to electronic money issuers and corporates and retailers (including on corporate card and co-branded arrangements). Their Payments practice is recognized externally as top- tier ranking, with commentary such as - "Osborne Clarke is one of the leading practices working in the payments services sphere" and in July 2012 an award for "TMT Team of the Year 2012" at The Lawyer Awards for their work on Everything Everywhere and Barclaycard's QuickTap product. Paul Anning Partner and head of Financial Institutions Group T+44 (0) 20 7105 7446 paul.anning@osborneclarke.com "A fabulous, full- service firm stuffed with bright and efficient people" Chambers UK "Osborne Clarke is one of the leading practices working in the payments services sphere" Chambers UK

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