Things you need to know about the Payment Services Directive 2

by Fleming. Team

The PSD2 race is on! And no, it is not a new PlayStation console but definitely a game changer. Time is running out to get fully ready for the PSD2. Around 5,000 EU financial institutions have time until January 18, 2018. It may sound like a good length of time, but there is huge amount of work to be done. Let's start from the introduction to this regulation.

It all started with the PSD, adopted in 2007. The main objectives were:

  • Stronger customer authentication
  • Rules and guidelines for payment services
  • Simplification of payment processes across the EU
  • Efficiency, innovation and cost reduction
  • Legal platform for the Single Euro Payments Area – SEPA
  • Better consumer protection

What new things does the PSD2 regulation bring to the table?

  • Scope beyond Europe
  • Prohibition of card surcharges
  • Security of online payments
  • Regulation of PSPs
  • New types of third-party providers

Bill Gates said in 90s: “Banking is necessary, banks are not.” Will we see an era with solely digital services? Will the new regulation change banking as we know it? And more importantly, why are some banks afraid of the PSD2?

1. They do not trust third parties
2. Increased competition on the market
3. They are afraid to be cut out of the payment processes

How can banks stay vital in this time of changing banking climate?

- Follow EBA guidelines and technical standards (RTS)
- Prepare for the cooperation with trusted third parties and payment service providers
- Focus on online – open API banking is around the corner
- Every byte counts – protect your client data
- Learn from fintechs and startups

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