PSD2 and how it will alter the financial industry
Since 2013, when the European Commission proposed a revision to the Payment Services Directive (PSD), many questions were raised as to how this will alter the financial industry, and who it will benefit. In just 6 months time, the new regulation PSD2 will be in full force and the answers to all the questions raised previously will be answered.
Unlike the first Payment Services Directive, the revised PSD2 legislation focuses on driving payment services forward by increasing competition, transparency and innovation throughout the payment market in Europe. PSD2 aims to improve payment efficiency in the EU by permitting access for third parties to customer data held by banks, lowering barriers to entry for third party providers and financial technology companies. These new service providers will be known as personal finance management platforms, which will take over the relationship between the customer and the banks.
These personal finance management platforms will have access to individual accounts, who will then deal with the merchant directly; meaning that even the money is in the bank, they won’t be able to engage with the customers, thus PSD2 will inhibit the opportunity ability to cross sell. Many industry experts have suggested how different this would be, with multiple bank accounts being viewed under one app, stimulating new business models and new services.
Furthermore, instead of using card, consumers will soon be able to pay directly from their bank account. Its instant transaction will most likely take over card payment, as it does not require you to enter your card details during an online purchase, which will be deemed inconvenient when this alternative is in place. Consequently, PSD2 will stimulate a fall in card usage and reshaping consumer behaviour and ecommerce.
Join us in London this October, to hear the latest on PSD2 from thought leaders across the top banks in Europe, and key companies creating implementable solutions. See you in London!
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