Important to promote competition on the payment market
Published: 3 November 2021
For payments to be efficient, it is important that there is sound competition between the actors offering payment services. Over the last decade, a number of fintech companies have become established on the payment market in Sweden. They use new digital technology and often challenge the established actors and structures. Several of the companies have introduced new, convenient ways of paying and have thus helped make payments in Sweden easier and safer (see New actors offer easy means of payment) However, the fintech companies are experiencing difficulties in obtaining access to important infrastructure necessary for offering payment services. For instance, the major banks govern which companies may use Bank-ID and Swish. Moreover, the fintech companies are experiencing difficulty gaining access to company accounts with the banks, which is a necessary condition to apply for authorisation as a payment institution.
A further problem for this type of actor is that they cannot be participants in the Riksbank's RIX settlement system. The question of who has access to the Riksbank's RIX settlement system is regulated in EU law, in the so-called Finality Directive, for instance. EU member states have implemented the directive in different ways, and only a few member states, including Hungary, currently allow fintech companies such as payment institutions and e-money institutions to be direct participants in their settlement systems. This means that clarification is needed so that the directive is applied in the same way throughout the EU. The European Commission therefore began a review of the Finality Directive at the end of 2020. This could lead to payment institutions and e-money institutions also being allowed to be direct participants in the payment system. The Commission has not yet presented any legislative proposals.
The EU's Second payment services directive (PSD2) aims to promote competition on the payment market. In connection with PSD2, two new payment services were introduced, in the form of payment initiation services and account information services that can be offered by fintech companies and other actors that are not banks. Payment initiation services mean that an actor, such as Trustly, can initiate a payment on behalf of a payer from the payer’s bank account. Account information services entail an actor being able to gather account information about a customer. PSD2 was implemented in Swedish law in May 2018, but fintech companies still perceive that it can be difficult to connect to the bank’s systems via so-called digital interfaces without any problems. Finansinspektionen published a clarification in January 2021 as to what obligations apply when companies gather information on bank customer’s payment accounts via digital interfaces. The European Commission intends to carry out a review of PSD2 during the fourth quarter of 2021, and if necessary to amend the legislation.