Browsing by Author "Earl, Emilie Marjatta"

A payment system ensures the movement of assets and is therefore vital within any modern economy. For this reason, it is equally important that that the payment service market is capable of evolving though time in order to match the current needs within the payment service market. With the growing need for technological solutions, the EU payment service market had fallen short of providing efficient payment services and therefore the European Commission chose to adopt the PSD2, which relinquished the natural monopoly traditional Banks had thus far built up within the payment service market and provided room for new competitors to enter the market, namely FinTech companies. The aim of this thesis is therefore to look into the regulation of the payment service market from the side of traditional Banks and FinTech companies, to consider whether the new PSD2 could pose a risk toward the financial stability of the EU, as FinTech companies are not subject to similar regulatory regimes as traditional Banks, particularly in terms of bankruptcy proceedings. Unlike traditional Banks, if FinTech companies were to run out of liquidity, they would become subject to corporate bankruptcy proceedings, which means that they would no longer be able to provide their payment services, resulting in service users possibly losing out on their assets. Based on the findings presented in this thesis it can be said that PSD 2 could affect the financial stability of the EU, particularly since the popularity and reliance of the shadow payment market is continuously growing. Therefore, this thesis also suggests some possible solutions, which could improve the resilience of the payment service market as a whole.