CARDNET

CARDNET L L O Y D S B A N K

H O S T E D B Y

JULIET MANN JOURNALIST & PRESENTER

Good Morning

CARDNET

GETTING TO GRIPS WITH NEW GOVERNANCE

A R E G U L AT I O N S U P D AT E

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H O S T E D B Y

JULIET MANN JOURNALIST & PRESENTER

I N T R O D U C E D B Y

AIDENE WALSH MANAGING DIRECTOR, LLOYDS BANK CARDNET

… regulation is an area where things are changing rapidly…

P R E S E N T E D B Y STEVEN BISOFFI SENIOR MANAGER, LLOYDS BANK CARDNET

G U E S T S P E A K E R MARC TEMMERMAN DIRECTOR EUROPEAN AFFAIRS, VISA EUROPE

AGENDA

§  Interchange Regulation Changes §  Payment Systems Regulator (PSR) Update §  New Payment Services Directive (‘PSD2’) Final Text

§  Integrate Payments Environment §  Promote Competition

§  Stimulate Innovation

§  Improve Services §  Open Access to Users

EU AIMS

Merchants pay ‘interchange fees’ as part of the Merchant Service Charge to the acquirer and these are passed onto the card issuers.

CARD ISSUER Bank

ACQUIRER Lloyds Bank Cardnet

INTERCHANGE FEES EXPLAINED

MERCHANT You

§  Interchange fee caps enforced (0.2% on domestic debit cards, 0.3% on credit cards)

KEY CHANGES TO INTERCHANGE REGULATION

Other changes:

§  Surcharging – recommended removal for consumer transactions

§  ‘Honour All Cards’ rule will change

SURCHARGING – AFFECTED MOST?

G U E S T S P E A K E R MARC TEMMERMAN DIRECTOR EUROPEAN AFFAIRS, VISA EUROPE

… from a Visa perspective, how will the new laws play out?

§  Several national options

§  Members have not specified rates

§  No option that applies to everyone

DEBIT CARD FEES

SUMMARY

‘HONOUR ALL CARDS’ RULE

§  Merchant has option not to accept all products under a given brand

§  Issuers to identify product type on plastic and in the chip

§  Europay, MasterCard, Visa (‘EMV’) specifications require update

§  Impact on terminals

§  Bank Identification Number (‘BIN’ ) tables – only interim solution possible

PAYMENT SYSTEMS

§  Separation of scheme and processing functions will have implications

§  EBA standards intended to be published by December

§  Will change structure of card scheme companies and how they deal with customers

P R E S E N T E R STEVEN BISOFFI SENIOR MANAGER, LLOYDS BANK CARDNET

… there are two key Articles that drive greater transparency…

SUMMARY

Greater transparency

of data for merchants

Article 12 Dec 15

Article 9 Jun 16

TRANSPARENCY I/C REGULATION

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H O S T E D B Y

JULIET MANN JOURNALIST & PRESENTER

SUMMARY

PAYMENT SYSTEMS REGULATOR (‘PSR’)

§  Consultation results in December/January

§  Outlined how different regulators will be responsible for different Articles

§  Collaborating with EBA to oversee separation of scheme and processing

WHAT THE PSR IS DOING

PSR: CARDNET RESPONSE

§  Feed back customer issues to PSR

§  Looking to implement new pricing proposition

§  New solution to provide all customers with greater transaction data

§  Will replace the existing PSD with a wider scope

§  Aims to create an integrated single market for electronic payments

§  Will expand regulations at a Europe-wide level to take into account the new payments landscape

2017 onwards Expected date for implementation at national level

2015 Final PSD2

text released

PSD2

§  Security of e-commerce payments

§  Reporting and monitoring of payments

§  Surcharging prohibition

SUMMARY

FINAL PSD2 TEXT – KEY DETAILS

UK – EXPECTED PSD2 TIMINGS

§  FCA expected to outline transition within three to six months

§  Timeline for completing transition – late 2017 or early 2018

§  UK regulators could ban surcharging ahead of PSD2 implementation

G U E S T S P E A K E R MARC TEMMERMAN DIRECTOR EUROPEAN AFFAIRS, VISA EUROPE

… what challenges do you see PSD2 creating in the payments market?

§  EBA to publish technical standards for adoption by European Commission

§  One-size-fits-all system will not work

§  Risk-based approach will be required

PSD2 - AUTHENTICATION

P R E S E N T E R STEVEN BISOFFI SENIOR MANAGER, LLOYDS BANK CARDNET

… any update on regulations around cyber security?

§  PCI DSS to come under increased scrutiny

§  Data breaches will have to be reported to regulators

§  Visa to focus on risk more than monitoring

DATA SECURITY STANDARDS

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H O S T E D B Y

JULIET MANN JOURNALIST & PRESENTER

§  Interchange Regulation will empower merchants and give them more choice

§  PSD2 will lead to greater competition and increased innovation

§  Other new regulations and new regulators mean it is a complex time for merchants

CONTENT SUMMARY

§  Engaging with regulator

§  Relaying customer feedback to regulator

§  Looking to introduce new pricing proposition

§  Making data more accessible

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