THE CONCEPT AND FEATURES OF PAYMENT SERVICES: EVOLUTION OF APPROACHES IN THE DIGITALIZATION ERA

Abstract

The article explores the modern concept and key features of payment services, as well as analyzes the evolution of approaches to their legal regulation in the context of economic digitalization. Payment services are defined as specialized activities related to the transfer of funds, provided by authorized entities on a contractual basis. Their essential features include a specific purpose (execution of payments), a licensed service provider, the use of advanced payment technologies, integration into payment infrastructure, and strict compliance with security regulations. Attention is drawn to the complex legal nature of payment services, which combine elements of both private and public law. It is demonstrated that digitalization has facilitated a transition from fragmented regulation of payment systems to a coherent legal framework covering all market participants. The Law of Ukraine «On Payment Services» (2021) is identified as a significant step towards aligning national legislation with European standards, in particular, Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market (PSD2). This contributes to increased competition and a broader range of services through the admission of new non-bank market players. It is noted that the development of the fintech industry, open banking, and new digital tools have substantially transformed the market structure and enhanced the importance of consumer rights protection. At the same time, key digitalization challenges are highlighted, including the need for balanced supervision, the avoidance of excessive regulatory power concentration, and the improvement of secondary legislation. The article outlines directions for further research aimed at optimizing the legal regulation of payment services, particularly regarding crypto-assets and international integration.