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  New technology in the banking sector, in particular new means of
  payment and of giving instructions for payment, is becoming
  increasingly accessible to consumers. It offers them a variety of
  cards, home banking, teleshopping, electronic payment at retail points
  of sale and machines which dispense banknotes, reveal the balance of
  his account, accept instructions for the transfer of funds from one of
  their accounts to another, or to the account of a third person and
  perform a variety of other operations as well.
  The Commission has endeavoured to define a concerted policy in this
  field. In January 1987, it published a document entitled "Europe could
  play an ace : the new payment cards"(2). The Commission's approach is
  essentially that of making the banking sector aware of the advantages
  of making the new payment systems interoperable in the single market
  and promoting crossfrontier cooperation so as to tackle the problems
  of technical standards, the relations between card issuers and
  retailers and the problems of protecting card users as consumers. In
  december 1987, the Commission therefore publised a code of conduct
  governing relations between card issuers and retailers who instal a
  payment terminal in their establishments.
  Today, the Commission adopted a recommendation addressed to payment
  card issuers, especially banks within the Community. This
  recommendation aims at establishing minimum rules for the protection
  of consumers in this field throughout the Community. The idea is to
  persuade card issuers to embody in the contracts they conclude with
  card users these minimum rules which protect the consumer, especially
  in the event of loss or fraudulent use of the card. The Commission is
  giving the banks a period of one year in which to implement these
  rules. It will stay in close touch with banks and other card issuers.
  If it should transpire that, when that period has elapsed, card
  issuers are not applying the rules, the Commission will take another
  look at the situation with a view to proposing a binding instrument.
  In the light of the success recorded in this field as regards the
  development of technology and the widespread introduction of
  electronic payment terminals, the Commission hopes that it will not be
  necessary to resort to a binding instrument to protect consumers'
  Although one Member State - Denmark in 1984 - has adopted detailed
  legislation on payment cards, the other eleven apply their general law
  of contract and civil liability to this new branch of economic
  activity. The various national rules are often highly divergent and,
  if no action is taken at Community level, this divergence will
  persist, if not increase.
  (1) COM(88) 427
  (2) COM(86) 754 final (published 1 January 1987)
  The practices which are growing up in many Member States as regards
  the consumer's liability in the event of fraudulent use, loss, theft
  or copying of cards or other means of using payment systems put
  consumers in situation which vary from Member State to Member State.
  These practices tend to become formalised by being written into
  standard forms of contract offered by issuers, so that the contract
  clauses applicable to a card issued in Belgium are different from
  those applied in Denmark, the Federal Republic of Germany, France,
  Greece, etc. The customer's liability thus varies, depending first on
  the type of card and secondly on the law which governs the contract,
  for the issuing of it or which governs the civil liability
  consequences which arise from its being lost, stolen or copied.
  This situation cannot but hamper the development of international and
  interoperable payment systems.
  Card issuers will be required to :
  - provide written terms of contract, full and fair, which are
  expressed in easily understandable words and in so clear a form that
  they are easy to read in the language or languages of the region(s) in
  which they are offered ;
  - discharge a rather particular burden of proof in any dispute with
  the holder of a card ;
  - carry liability for the consequences of defects in, or failure of
  operation of, the cards which they issue ; such liability may in
  certain circumstances have to be borne by the issuer jointly with
  another person or persons, e.g. a retailer and/or a network assembler
  - provide means whereby their customers may at any time of the day or
  night notify the loss, theft or copying of cards.
  Manufacturers will have to ensure that the networks, and in particular
  the equipment containing card-readers, are capable of producing
  records which are sufficiently substantial to enable transactions to
  be traced and errors to be rectified, and of supplying the cardholder
  with a written record of each transaction. Assemblers and issuers of
  cards (including petrol and oil companies and also rental businesses,
  e.g. car rentals) will also be involved in this aspect either directly
  or indirectly and retailers obviously have a special interest and
  involvement in it.
  Contracting holders will be liable for damage arising out of the loss
  of their payment devices up to the time they notify the issuer of that
  loss, but that liability may not exceed the equivalent of 150 ECU.
  However, this ceiling does not apply where holders have committed an
  act of extreme negligence or behaved fraudulently.
  a) Major savings
  Experts on the new technologies, including those from the banks
  themselves, have estimated that the credit institutions are on the way
  to reducing their overhead costs of providing payment systems (notably
  cheque payment) BY AS MUCH AS SIXTY PER CENT.
  b) Speed and security
  Retail outlets wishing to use this new technology will have to be
  equipped with lines, card-readers and pin-pads. They can either buy or
  rent these. Electronic funds transfer at point of sale, by direct
  debiting, will give the retailer the advantages of immediacy of
  payment (as compared with the delays involved for him in receiving
  payment by cheque or by credit card), more rapid movement of customers
  through the "pay lines", and reduction in the amount of cash held on
  the premises and thereby greater physical security for persons. These
  considerations would suggest that retailers will be served by these
  c) Convenience for the consumer
  The advantages which the new technologies provide for financial
  institutions and providers of goods and services will be shared by
  consumers, who will profit from the convenience they provide in making
  necessary payments.

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