Role and Security of Payment Systems in an Electronic Age -- Remarks by Mark Fajfar Prepared for an IIMF Institute Seminar on Current Developments in Monetary and Financial Law, Washington , D.C. June 1, 2004

In the past decade, methods of effecting banking and other financial transactions via the Internet in the United States have quickly become more and more sophisticated. This paper will examine, from the viewpoint of a U.S. legal practitioner, the implications of this trend towards conducting financial transactions electronically. The focus of this paper is not on legal theories, but rather on the interesting and novel practical issues that arise in the legal implementation of new electronic payment systems that are now more prevalent or are appearing on the horizon. This paper discusses consumer, as opposed to business-to-business, transactions and concentrates on how the particular characteristics of the new electronic payment systems (contrasted to the “traditional systems”) affect the consideration of two issues: information security and efforts against money laundering and terrorist financing.