Consumer protection in payments - open banking implications

Do payments systems need consumer protections built into them?

Most countries have consumer protection laws for purchases, with additional protections if paid with credit, removing the need for payment systems to define their own rules. 

However, payment systems need users and it benefits them to be user friendly, in particular in three areas where:

1. payments are made in error, especially when pulled by a third party e.g. direct debits, solved in the UK by a direct debit guarantee
2. consumers need to know how raise a dispute with merchants e.g. in the Netherlands consumers  can contact their bank if they have used iDeal for the purchase
3. the payment system has fraud vulnerabilities e.g. chargebacks in cards.

Every payment system needs to address these areas in their own way. Open banking is no different. It has its own risks, including data access risks which need their additional mitigations. 

I have outlined some suggestions here for mitigating open banking consumer risks, https://lnkd.in/ejETHdGr highlighting the importance of avoiding blanket solutions; and avoiding the mistake of applying solutions which address a different risk profile to the ones needed (e.g. applying chargebacks used for cards, where the risk of unauthorised fraud is high, to open banking where the risk of unauthorised fraud is low).