Tuesday, 1 November 2016

Could HCP provide “Durable Medium” for e-payment?

The Payment Services Directive[(PSD, 2007/64/EC) is an EU Directive, administered by the European Commission (Directorate General Internal Market) to regulate payment services and payment service providers throughout the European Union (EU) and European Economic Area (EEA). The Directive's purpose in regard to consumers was to increase customer rights, guarantee faster payments, describe refund rights, and give clearer information on payments. One of the requirements is that information on contractual changes be provided in a timely manner to consumers on a durable medium.

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Durable medium can be paper or any medium that can guarantee unaltered "reproducibility". This requires both the possibility to store the information for the consumer and the impossibility for the service provider to alter the contents of said information.

 

In 2015 the PSD was revised to adapt it to the digital age and PSD2 was viewed as an important step towards a Digital Single Market in Europe. However, e-payments has raised some consumer concerns about what constitutes “durable medium”.

 

On September 15 of this year, EU Attorney General Bobek, issued an opinion on whether the use of an e-banking mailbox by an Austrian bank was “durable medium”.  “According to Attorney General Bobek, it will be difficult for internal mailboxes to fulfill these requirements on their own merits- in other words, the mailbox can hardly be the "support" or durable medium on which information is provided.” One alternative is to use paper, but that would be expensive and would defeat the advantages of e-payments which is faster payment processing.

 

An object store from Hitachi could provide a solution to this requirement.

 

Hitachi’s Object store, HCP, creates a hash of an object (file) when it is ingested into the store. This hash is checked again when the object is retrieved to prove that nothing has changed since it was first ingested. The hash provides immutability which is the requirement for “durable Media”. Updates to an object are entered as a new version of the original object and the object is encrypted for privacy.  The data is duplicated to insure availability. This object store could be connected to email, web, and file servers via Veritas enterprise vault or directly through an SMTP, File, or HTTPs interfaces. The file or object can also be accessible on mobile devices with HCP AnyWhere

 

In order to verify, that HCP meets the requirement for “durable Medium”, one would have to submit this to the EU. If there is no response, one could assume that it is accepted. This would certainly be a more cost effective “durable medium” than paper.

 

While this is a EU directive it will influence the Americas and Asia, since financial systems are all connected. So review your durable medium requirements and check with your HDS representatives to see if HCP can help you with this requirement.



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