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General Information
Retail payments include consumer
and corporate payments, constituting the bulk of payment transactions
within the economy, but exclude high-value
payments generated within the interbank space.
While it is cash that constitutes legal tender, and is thus the
basis for the monetary system, its drawbacks are becoming increasingly
evident
in the modern economy. In particular, its use entails that it
must be carried to a payee, it is inefficient to process and handle, and
it escapes
the banking system and thus is prone to use in money laundering
and terrorist financing. Retail payments are instead increasingly being
carried out
by non-cash payment instruments, including credit and debit cards,
credit transfers and direct debits. While cheques have been the traditional
non-cash
payment instrument in Malta, electronic payment services are
gradually bringing the costs and inefficiencies of cheque processing to
light.
Efficient and reliable payment
services are essential for the smooth functioning of the economy.
The introduction of the euro should provide
an important contribution to Malta's retail payment infrastructure.
However, while the euro area is a single currency area in respect
of cash, work
is still in progress in respect of other payment instruments
and services. Citizens and businesses alike can only benefit
fully from the European
Union’s principles of free movement of goods, services, capital
and people if they are able to transfer money rapidly, reliably
and cheaply from one part of the euro area to another.
The objective of the eurosystem in respect of retail payment services
is to create a single payments market for the euro, and therefore to deliver
domestic and cross-border payments in euro efficiently and on the same
terms. There are three key policy goals addressed: promoting transparency
of the operation of payment systems and services, monitoring the determination
of fees and charges, and promoting market access, competition and efficiency.
Within this context, the European banking industry is in the
process of creating a Single Euro Payments
Area (SEPA). SEPA is a self-regulatory
initiative conducted under the oversight of the European System
of Central Banks. The Central Bank of Malta (the Bank) has also
been involved in the domestic
introduction of IBAN, a set standard
for bank account numbers that uniquely identifies a customer’s bank
account held at a bank anywhere in the world.
Along with overseeing retail payment systems, the Bank may regulate
payment services and payment instruments by means of Central
Bank of Malta Directives. It also has the authority to promote
the establishment of
a bank clearing system for retail payments and to provide facilities
for that system. The Central Bank of Malta, together with six
credit institutions, has set up and is a member of the Malta
Clearing House.
Current Legislation
Legislation in respect of retail payment services includes Regulation
2560/2001/EC on cross border payments in euro. The European Commission
has published two interpretative notes on the application of the Regulation:
The Central Bank of Malta has also published two Directives
under the Central Bank of Malta Act in respect of retail payment
services, namely
Directive
No. 3: Cross-border Credit Transfers and Directive
No. 4: Electronic Payment Services.
Consultative Paper on Retail Payment Services
Policy and the Payment Services Directive
On 28 January 2008, the Central
Bank of Malta published a consultative
paper intended to guide the Bank’s future initiatives in relation
to payment services and to inform Malta’s future transposition of
the Payment
Services Directive, which is to be completed by November
2009. Developments in the Bank's retail payment services policy,
coupled with
transposition of the Payment Services Directive and implementation
of SEPA will considerably change
the payment services market landscape in Malta and will affect
the business processes
of all enterprises which process their own payments or the payments
of others. The Central Bank of Malta invited comments on this consultative
paper up till the end of April 2008.
Link to Malta Clearing House
Link to SEPA
Link to IBAN
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