Tuesday, March 02, 2004

Single number to report lost and stolen cards

The EU observer reports about a Commission initiative that aims at establishing a single European telephone number to report lost and stolen cards.

The proposal to establish a single number is linked to possible future EU legislation aiming to create a Single Payment Area. To prepare the ground for this, in December 2003 the Commission issued a Communication on a "new legal framework" for payments in the Internal Market, seeking views from consumers and businesses (see this link).

The proposal is a perfect example of the estethics paradox in policy making. This paradox (first observed and outlined by yours truly in a presentation for a financial markets policy makers course) tells us that if you give policy makers a desk and a vague job description, the first thing they do is make an overview of the world. Then they discover the confusing reality of multitudes of systems and solutions. And then they immediately jump to the conclusion that a single policy is desired. Or for that matter, a single phone number for lost and stolen cards.

Meanwhile the policy makers forget to answer more relevant questions such as:

- is there a problem in practice and what is the size of the problem?

- who is the problem owner: the market or government?

- are there indications that, if a problem would exist, the market is not going to solve it?

- if government or regulatory intervention is required, which is the most appropriate form that does most justice to the roles of market and government?

Instead they go about finding backing for their theoretical and esthetic plan(s). In this case they seek an alliance with the public, who can fill in a questionairre here. Still us EU-citizens are not allowed a single character of free open response to further detail any objections to the questions asked.

So is there nothing positive to mention here? I guess there is. We should all be happy that the EU policy makers didn't conceive and consult us on the real solution to all their esthetical/observer problems: fast track regulation to ensure that each EU-citizen gets one single card for all payments, issued for free by one single European bank.