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Web-Based and Mobile Payments: Compliance with Financial, Data Protection, and Telecommunications Regulations

As digital payment systems become increasingly popular, it’s essential for providers to comply with various regulations to ensure the integrity and security of transactions. In Switzerland, payment service providers (PSPs) must adhere to financial regulations, data protection laws, and telecommunications standards.

Financial Regulations

The Anti-Money Laundering Act (AMLA) and its accompanying FINMA ordinances and SRO regulations require PSPs to implement measures to prevent money laundering and terrorist financing. According to FINMA Circular 2011/1, PSPs must have the power to dispose of financial assets on behalf of their contracting parties. However:

  • Payment initiation services may be deemed out of scope of AMLA regulation if the bank is seen as triggering the ultimate payment transaction.

Data Protection

Data security is a top priority for digital payment systems, as users require confidence in the integrity and authenticity of transactions. The Data Protection Act (DPA) and ordinance (DPO), as well as the EU General Data Protection Regulation (GDPR), apply to PSPs. Personal data may not be collected if not directly required for transaction processing, and users must have reasonable options to decide which data may or may not be transmitted to third parties.

Telecommunications

The Telecommunications Act (TCA) applies to Internet and telecommunications service providers in Switzerland. Payment service providers must ensure compliance with telecommunications regulations, including the provision of universal services subject to a concession.

Conclusion

In conclusion, PSPs must comply with various regulations to ensure the security and integrity of digital payment systems. This includes financial regulations, data protection laws, and telecommunications standards. Failure to comply can result in legal consequences, damage to reputation, and loss of user trust.