Dutch banks are protesting about European Commission plans which they say will give companies such as Google and Apple more insight into people’s payment patterns and allow them to earn money from the information, the Financieele Dagblad reports on Wednesday.
Europe has been debating the introduction of a new payment directive, named PSD2, for over a year. The aim of the directive is to stimulate competition and innovation in payment traffic from players outside traditional banks. It allows third parties to develop ‘software bridges’ such as iDeal between retailers and banks.
However, Dutch banks argue that the software bridge providers will be subject to more relaxed regulation than banks and will be free to find other uses for the information they glean about consumer spending habits.
Last year, ING evoked a storm of criticism when it suggested selling information about its clients’ payment habits to advertisers.
‘Google will soon be able to swallow up and use payment information,’ Gijs Boudewijn of payments sector lobby group Betaalvereniging Nederland told the paper. ‘Why are they allowed to do it when banks are, correctly, expected to show the highest possible duty of care. That does not seem right to banks or consumers.’
Although customers will have to give permission for their details to be used by third parties, this will be ‘a tick on page 32 of the terms and conditions,’ Boudewijn says.
Critics also point out that the use of software bridges encourages consumers to share their banking passwords – a practice that is usually discouraged in the interests of deterring cyber criminals – the potential for fraud could substantially increase, website Euromoney reports.
Two years ago, the company responsible for processing direct debit (pin) transactions in the Netherlands dropped plans to sell the information to retailers.
Information about how many times people use different shops and how much they spend will be extremely useful to the retail sector, Equens said at the time. Equens is owned by the three big Dutch banks.
And last year, ING said it was considering selling companies information about what its customers spend their money on so they can directly target advertising at them.
That plan was ‘postponed’ after MPs, consumer groups, the central bank and financial services regulator AFM said they were unhappy about the plans.
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