Payment Institutions – Potential Implications of the New Category of Payment Service Providers for the Austrian Financial Market

Ulrike Elsenhuber () and Benedict Schimka ()
Additional contact information
Ulrike Elsenhuber: Oesterreichische Nationalbank
Benedict Schimka: Oesterreichische Nationalbank

Financial Stability Report, 2005, issue 10, 64-73

Abstract: Unlike in other areas of the financial market, progress toward the integration of payments markets has not yet been satisfactory. While the introduction of the euro was an important step in this direction, a single European payment area for cashless payments still does not exist. Current initiatives thus aim to lay the groundwork for integrated cross-border payment transactions, in particular by harmonizing the applicable legal framework. The European Commission’s New Legal Framework for Payments in the Internal Market initiative is of special importance here. It proposes, inter alia, the introduction of a new category of payment service providers (payment institutions) in addition to credit and e-money institutions that would perform payment services under comparatively less stringent licensing and supervision regulations. Against this background, the Oesterreichische Nationalbank conducted an empirical survey among Austrian market participants (banks and nonbanks) in the summer of 2005 to assess possible competition and risk-related implications of the introduction of payment institutions on the Austrian financial market. The survey showed that most of the Austrian market participants questioned were critical of the current draft Directive and that respondents shared the European Commission’s primary expectations - for example, that it will create a level playing field - only partly or not at all. On the contrary, they fear distortions of competition, increased risks and, over the long term, a loss of confidence in the stability of the payments market among end users. There is unanimous agreement among respondents that both payment and credit institutions should be subject to the same capital and supervision requirements in order to head off these risks. Furthermore, the survey shows that none of the Austrian market participants questioned is currently considering transformation into a payment institution.

Keywords: Payment Institutions (search for similar items in EconPapers)
JEL-codes: G29 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.oenb.at/dam/jcr:a37f198d-9385-4b3b-b4c ... l_01_tcm16-36856.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbfs:y:2005:i:10:b:1

Ordering information: This journal article can be ordered from
Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria

Access Statistics for this article

Financial Stability Report is currently edited by Markus Schwaiger, Birgit Niessner, Vanessa Redak and Martin Schuerz

More articles in Financial Stability Report from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Stefan W. Schmitz ().