The PAYTECH Book

PayTech Regulation Trends

By Bruna Jachemet Esin

Lawyer, Brazilian Bar Association

Payment innovation and related technologies have the potential to make electronic payments faster and globally more accessible. However, the flip side of this is that there is an increase in the already inherent risks in the payments ecosystem. Historically, the primary objective of payments’ regulation has been to ensure systemic stability, which has multiple facets, the most prevalent being security and efficiency. More recently, the entry of non-financial players and non-fiat currencies into the payments ecosystem has created new or enhanced threats to the stability of the financial system. As a result, regulators tend to address the risks that are growing in line with innovation in payments. In an attempt to foresee potential future regulation, this chapter focuses on five identified trends.

1. Nationalism

Nationalism promotes the interests of a particular nation, favouring self-governance over outside interference. As far as regulation of e-payments is concerned, nationalism manifests itself by restricting participation of foreign entities and protecting national currencies.

Some jurisdictions have regarded it as necessary to impose rules to protect particular local interests, such as in India, where the Reserve Bank of India’s rules since 2018 require that data relating to Indian transactions be stored locally. Other jurisdictions require domestic payments to be processed locally. This ...