UNIVERSITETET I OSLO Electronic Payment Olav Torvund

UNIVERSITETET I OSLO (Electronic) Payment © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO One upon a time. . . • . . . There was money • They disappeared long before the financial crisis • We had nice documents © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO Forget the e • Payment is payment • Almost all payments are executed by electronic means © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO What is payment? • Distinguish between payment and invoicing • Payment is transfer of funds form a payer to a payee • A system that only register invoicing information is not a payment system © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO • 5. "payment transaction" means an act, initiated by the payer or by the payee, of placing, transferring or withdrawing funds, irrespective of any underlying obligations between the payer and the payee © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO What is money? • Money is not technology! • A strictly legal definition: – F. A. Mann: The legal aspect of money, p. 8: – “It is suggested that, in law, the quality of money is to be attributed to all chattels which, issued by the authority of the law and denominated with reference to a unit of account, are meant to serve as universal means of exchange in the State of issue. ” © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO • An economic definition: – Funds that function as money © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO Money - continued • UNCITRAL Model Law on International Credit Transfers, Art. 2 h: – “"Funds" or "money" includes credit in an account kept by a bank and includes credit denominated in a monetary unit of account that is established by an intergovernmental institution or by agreement of two or more States, provided that this law shall apply without prejudice to the rules of the intergovernmental institution or the stipulations of the agreement; ” © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO • Directive 2007/64/EC Art 4 – 15. "funds" means banknotes and coins, scriptural money and electronic money as defined in Article 1(3)(b) of Directive 2000/46/EC; © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO An inportant distinction • Funds – 15. "funds" means banknotes and coins, scriptural money and electronic money as defined in Article 1(3)(b) of Directive 2000/46/EC • Payment instrument – 23. "payment instrument" means any personalised device(s) and/or set of procedures agreed between the payment service user and the payment service provider and used by the payment service user in order to initiate a payment order http: //www. torvund. net © Olav Torvund - SENTER FOR RETTSINFORMATIKK

Cash payment Tranport of valuable goods

UNIVERSITETET I OSLO What is the relevance? • We pay by transfer of a claim or by establishing a claim with the payee as creditor. • The law that relates to monetary obligations and transfer of these, are not the same as the law that relates to transfer of physical property. © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

From two parties

To three two-party transactions Seller Buyer

UNIVERSITETET I OSLO Two payment situations • Independent payment – Paying of bills • Payment against delivery – Electronic commerce © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

Credit transfer

UNIVERSITETET I OSLO Payment order - Directive 2007/64/EC art. 4 • 16. "payment order" means any instruction by a payer or payee to his payment service provider requesting the execution of a payment transaction © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

Debit transfer

Debit Transfer - risk

Debit Transfer - Encrypted

Debit Transfer - Certificates

Cash payment Tranport of valuable goods

From two parties

To three two-party transactions Seller Buyer

Credit transfer

Debit transfer

Debit Transfer - Encrypted –I am Donald Duck

Debit Transfer - risk

Debit Transfer - Encrypted

Debit Transfer - Encrypted –I am Donald Duck

Debit Transfer - Certificates

Debit Transfer – More than one bank

Credit Transfer

Credit Transfer

Seller Deterritorialisation Buyer

Reterritorialisation Seller Buyer

Reterritorialisation Seller Buyer

Reterritorialisation Seller Buyer

Reterritorialisation Seller Buyer

Reterritorialisation Seller Buyer

E-cash

E-cash

E-cash – More than one bank

Smart Card based “Electronic Money”

Smart Card based “Electronic Money”

UNIVERSITETET I OSLO “Electronic Money” – some situations • Pre-payment of services with one service provider – Phone cards – Tickets – Parking – Etc • Pre-payment of services with more than one service provider – How do you distribute the payment among the service providers? © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net

UNIVERSITETET I OSLO End to end micropayment will never happen • Pool-based clearing – portals are needed © Olav Torvund - SENTER FOR RETTSINFORMATIKK http: //www. torvund. net