PayPal Releases Payments Industry Legislative Proposals

PayPal has released a paper proposing fundamentally changing the way regulators create legislation.

The paper gives a brief overview of the industry players and the innovations that have come about throughout the years.

The core argument here is that the rate of advancement and innovation in the payments industry is outpacing the rate of regulation. Legislation is slow, cumbersome, and often stifles innovation – especially in the areas of usability and consumer-friendlier services.

The most important parts of the proposal posits that leveraging big data to proactively monitor consumer habits, then in turn, taking this knowledge to create regulation and best practices is the best course of action.

These models of monitoring and regulatory guidelines that adapt to the size and scope of different payment companies seem to be an answer to the “traditional one-size-fits-all design standards that have been the basis of traditional regulation.”

The paper concludes “These techniques can be utilized by policymakers and regulators to glean new insights and make better decisions when it comes to regulation. We have demonstrated that this model is ripe for application in the payments market, where current regulation is failing to keep up with the fast-moving industry. “

If these new standards were to be adopted in the future, it would be a definite win for financial institutions managing their regulatory hurdles.

The full report can be found here.