The European Commission published an ambitious package of measures today that have the potential to improve consumer conditions in payments and digitalised financial services. There are proposals on a digital Euro (while maintaining access to cash), steps to tackle payment fraud and on protecting consumers’ data in Open Finance.

BEUC Director General Monique Goyens commented:
On the digital Euro: “This package contains many good advances for consumers. The digital Euro is a major innovation and has the potential to become the digital equivalent of cash. We’re happy the Commission echoed our request to make it free, widely available and ready for offline use, which is essential to ensure consumer take-up. It is high time that we break the dependency from major international card schemes to pay on and offline.”

On cash: “Those who prefer to use cash will welcome the news that it is here to stay as countries would be obliged to come up with strategies to guarantee access to it. Many consumers still prefer to pay in cash for budget management, privacy, or accessibility reasons for those with disabilities.”

On fraud: “There are important steps to tackle payment fraud which is a major concern for consumers across Europe. Everybody at some point has received a fraudulent mail or SMS impersonating their tax office or a streaming service. It is far too easy for consumers to fall into the trap as scams become more sophisticated. This is why we need to make sure consumers are protected in those situations as well.”

On Open Finance: “Consumers would also get added protection for their data when using Open Finance. But we’d like to see additional measures to prevent consumers’ data being used, for example, to charge people more for car insurance if they frequently park in a poorer neighbourhood. It’s also important that those who do not want to share their data can still have full access to financial services.”

What the proposals would mean for consumers:

Digital Euro:

• A digital Euro account free of charge for all consumers within the eurozone; mandatory acceptance by traders; privacy for offline payments, and dedicated customer service for vulnerable consumers would be provided by Payment Service Providers.

Cash:

• Mandatory acceptance of cash and EU countries would need to set up strategies guaranteeing consumers’ access to it.

Payment fraud:

• ‘IBAN check’ for credit transfers, which will warn consumers if they are making a payment to a suspicious recipient (e.g., if fraudsters use their own account details but with the name of an energy supplier).
• But consumers would remain unprotected in some cases. For example, consumers could get reimbursed when fraudsters impersonate a bank employee, but for many other cases of social engineering fraud, banks will have a lot of discretion to say that it was the consumer’s fault.

Open Finance:

• Open Finance will allow consumers to find financial products better suited to their individual needs by enabling them to share data in confidence with developers of new financial services. The Commission proposes extra steps to protect consumers’ data in addition to what the GDPR already provides in the form of consumer dashboards and data perimeters. But there’s a danger of consumers’ data being used to personalise their risk profiles undermining the basic principle of solidarity in insurance.

Background:

• Consumer checklist: The digital Euro must become the digital equivalent of cash

• Factsheet: A payment fraud epidemic – what’s the remedy?

• BEUC and AGE Platform Europe factsheet: Everyone needs to make payments – the importance of inclusive payment methods

• Factsheet: Making Open Finance consumer-friendly