Global Payments Newsletter, August 2021
Key developments of interest over the last month include:
- Brazil: Central bank publishes details of push towards Phase 2 of Open Banking
- United Kingdom: PSR launches Digital Payments Initiative
- Estonia: Central bank publishes results of digital euro experiment
Brazil: Central bank publishes details of push towards Phase 2 of Open Banking
On 2 August 2021, the Central Bank of Brazil published Normative Instruction No. 136 of 29 July 2021 containing new details regarding the country’s push towards Phase 2 of Open Banking.
The Central Bank of Brazil mandates that participating institutions must implement the scaled and efficient launch of Open Banking APIs for the purpose of sharing registration and transactional data. To achieve this, the central bank considers that Phase 2 of Open Banking should be carried out in four cycles, with the first cycle starting on 13 August 2021 and the final cycle ending on 24 October 2021.
The Normative Instruction also places limits on the number of interface calls allowed per participating institution during the launch period, to two interface calls per month for registration data and 120 interface calls per month for transactional data.
United Kingdom: PSR launches Digital Payments Initiative
On 30 July 2021, the Payment Systems Regulator (PSR) launched a new initiative to examine potential barriers to the take-up of digital payments and to identify solutions to these barriers. The move is part of the PSR’s response to the 2020 Access to Cash Working Group’s recommendation for further work on digital payments.
The initiative will be led by the PSR Panel and it will focus on four key areas:
Identifying potential purchases or transactions where digital payments could provide a solution to future needs (e.g. caregivers with multiple clients, budgeting tools);
Collating evidence from other jurisdictions;
Identifying practical challenges for users and small businesses that could prevent the adoption of digital payment options; and
Identifying technical and / or regulatory barriers within the PSR’s remit to enable suppliers of digital payment services to develop new payment solutions.
For the moment, the initiative will be confined to the PSR’s remit. The PSR Panel is expected to present its findings later this year.
Estonia: Central bank publishes results of digital euro experiment
On 26 July 2021, the Eesti Pank, Estonia’s central bank, published a press release and report on the results of its digital euro experiment, carried out alongside the European Central Bank and the central banks of Spain, Germany, Italy, Greece, Ireland, Latvia and the Netherlands.
The experiment saw payments made in digital money between people with digital identities from Estonia, Latvia, Lithuania and Spain. The results showed that the blockchain technology used is easily scalable, meaning that the number of payments in digital euro can quickly be increased if needed. The technology also did not set any essential limits on the size of the money supply, ie it could support the entire supply of euros in circulation and more. Moreover, the technology could be linked to forms of electronic ID so that the security of payments is heightened. The bank considered that the various parties involved could only see information on the payment, but it was still possible to carry out the necessary anti-money laundering controls.
The conclusion was that a novel blockchain-based solution could support an almost unlimited number of payments being processed at the same time with a smaller carbon footprint than the card payment system.
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