© olav torvund - senter for rettsinformatikk universitetet i oslo (electronic) payment

© Olav Torvund - SENTER FOR RETTSINFORMATIKK

UNIVERSITETET I OSLO

http://www.torvund.net

(Electronic) Payment

http://www.torvund.net/




One upon a time ...

• ... There was money• They disappeared long before the financial

crisis• We had nice documents





Forget the e

• Payment is payment• Almost all payments are executed by

electronic means





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





• 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





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.”





• An economic definition:– Funds that function as money





Money - continued

• UNCITRAL Model Law on International Credit Transfers, Art. 2h:– “"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;”





• 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;





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


Cash payment

Tranport of valuable goods




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.


From two parties

To three two-party transactions

Seller Buyer




Two payment situations

• Independent payment– Paying of bills

• Payment against delivery– Electronic commerce


Credit transfer




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


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

–I am Donald Duck


Debit Transfer - risk

–I am Donald Duck


Debit Transfer - Certificates

Debit Transfer – More than one bank

Credit Transfer

DeterritorialisationSeller Buyer

Reterritorialisation

Seller Buyer

E-cash

E-cash – More than one bank

Smart Card based “Electronic Money”




“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?





End to end micropayment will never happen• Pool-based clearing – portals are needed

© olav torvund - senter for rettsinformatikk universitetet i oslo (electronic) payment

Documents

money slide

olav torvund senter

rettsinformatikk universitetet

oslo http

electronic payment slide

payment order slide

payment system slide

invoicing payment