The French competition authority (ADC) has launched a public consultation on the Fintech industry in the country. The ADC is looking for feedback on the potential role of large digital platforms in the payments sector. It’s also seeking input regarding new payment service providers and the competition they might bring to France’s financial ecosystem.
The ADC aims to understand whether the new payments services will complement existing financial services and platforms or whether they’ll be competing with incumbents.
The ADC says it will take the feedback and use it to offer its opinion on how regulations should be created for the digital payments space and Fintech platforms and how they should be enforced. This might be a good opportunity for all market participants to provide suggestions, so that their recommendations might be considered by the ADC when it’s drafting new regulations. The deadline for submitting feedback to the ADC is June 19, 2020.
Other regulatory bodies and entities such as the European Commission have been actively monitoring mobile payments service providers. Meanwhile, the Dutch competition authority recently conducted a review of activities of Big Tech firms in the country’s payments sector.
The ADC noted that the use of mobile phones and Internet of Things (IoT)-enabled devices has led to the development and launch of innovative digital payments services in France.
As noted by JD Supra, cloud-based storage systems and blockchain or distributed ledger technology (DLT) have led to the development of digital wallets and cryptographic assets. The ADC aims to understand how these technologies will impact competition in the payments sector.
The ADC is also examining the different ways that traditional banks have adapted or responded to innovations in Fintech. Many incumbents have launched their own financial technology initiatives, while others have either invested into R&D efforts or teamed up with Fintechs to develop various products and services.
The ADC is looking for feedback on whether it would be beneficial if French banking groups begin acquiring Fintech businesses. The regulator’s consultation consists of several questions which aim to get a general overview of the Fintech market. The ADC would also like to know whether market participants consider new entrants as competitors or companies that might be complementing existing services.
Respondents will also be asked to offer feedback regarding any potential malfunctioning of competition in the Fintech industry, because of the use of new payments services, and also if there could be any issues when transacting or using crypto assets, blockchain, and cloud technologies.
The feedback obtained from the consultation will be reviewed before the ADC makes any recommendations or creates regulations and takes measure to enforce them.
The results of the consultations will reportedly be shared with the larger network of European competition agencies (ECN).