IBANs or IPANs? Creating a Level Playing Field between Bank and Non-Bank Payment Service Providers

Abstract

The intention of the European legislative bodies, which is enshrined in different legal acts, such as the Payment Services Directive and the second Electronic Money Directive, is to boost competition and innovation on the payments market by creating new categories of payment service providers, i.e., payment institutions (PIs) and electronic money institutions (EMIs). Traditionally, banks operating current accounts of consumers and companies used to be major payment service providers (PSPs), which as a group faced only marginal competition in the payments business at the front end. However with the advent of new laws on payments in Europe and the rising willingness of customers to use innovative services of non-banks, questions need to be posed about the level playing field between old and new players.