mr hartmann reflects on recent developments in international payment systems speech delivered by mr wendelin hartmann, member of the directorate of the deutsche bundesbank and chairman of the committee on payment and settlement systems of the g10 central banks, at the conference of the belgian financial forum celebrating 25 years of the belgian automated clearing house - cec ( concluding session ), held at the national bank of belgium, brussels, on 23 november 1999. * * * ladies and gentlemen, the belgium clearing house cec ( centre for exchange and clearing ) is celebrating its 25th anniversary this year, and today ’ s speeches have shown that it can justifiably be called a success story. the early standardisation and centralisation of retail payments in belgium offers many advantages from the point of view of cost and efficiency and might well act as a model for solving the many different problems in cross - border payments in europe. as the representative of a central bank of a country with a much less centralised payment settlement, albeit with a high degree of standardisation, i am, of course, able to envisage other solutions as well. it is probably no exaggeration to say that today ’ s conference has fully met its objective. it has given all those involved in european retail payments - the financial industry as the service provider as well as the users and regulators - the opportunity of presenting their different standpoints, thus offering a platform for a very interesting and constructive exchange of views. considering the current developments in international payments highlighted by preceding speakers i would like to conclude that cross - border retail payments - including those in the euro area, in particular - are still in need of considerable improvement in terms of quality, efficiency and prices. the aim must be a dramatic reduction of the existing marked differences between domestic and cross - border payment services and their complete elimination in the longer term, so that the motto of this conference, “ one eurozone for retail payments ”, can become a reality. eu directive on cross - border payments the fact that the european parliament and council directive on cross - border payments has now been implemented in almost all the eu member states means that a major step towards greater transparency and a better service level has already been taken. however, this measure alone will not be sufficient to meet the requirements of an efficient single market and the expectations of european consumers. given a single currency and the use of electronic transmission media, the general public naturally does not understand why a credit transfer from brussels to frankfurt should be several times

role as overseer in payments. for that reason, the cpss has intensified its activities in the area of retail payments in recent years - and, not least in view of the rapid developments, particularly in the area of new electronic payment instruments, what is known as “ electronic money ”. electronic money “ electronic money ” can normally be divided into card money and network money. in the case of card money, electronic value units are being stored on chip cards, which are known as prepaid - cards or electronic purses. it is a new electronic payment instrument which is mainly designed for retail payments and is intended to replace cash transactions when purchasing lower - priced goods and services, for example, from vending machines. besides this, another form, which is known as network money, has developed. here, the value units stored on chip cards or hard disks are used to make electronic payments via computer networks such as the internet. although the development of network money is currently still at an early stage, the increasing importance of the internet and thus of electronic commerce will undoubtedly contribute to a rapid spread of those products in the future. the central banks are affected in two ways by the development of electronic money. first, this new instrument has the potential to replace cash and may have an impact on the demand for money and its velocity of circulation. implications for monetary policy and seignorage cannot therefore be ruled out. second, the central banks have the task of maintaining the integrity of payments. they therefore have to examine the question of the technical security of these new instruments as critically as the reliability and financial integrity of the issuers of electronic units of value. the extensive analyses conducted by the g10 central banks were incorporated into two reports published in august and october 1996, respectively : “ security of electronic money ” and “ implications for central banks of the development of electronic money ”. in contrast to the emu, where the central banks issued the recommendation that the right of issuing electronic money should be restricted to credit institutions, the g10 central banks did not propose a binding regulatory framework for the time being. but they will - as at the eu level continue to monitor developments in this area very closely in the future in order to be able to initiate any appropriate measures that are necessary. in the eu, the directive on the taking - up, the pursuit and the prudential supervision of the business of electronic money institutions, which was drawn up some time ago, under which e - money institutions in principle become credit institutions