Based on the huge amount of recent appeals, fears and concerns, which are caused by coming directive PSD2 in 2018, SDK.finance decided to dedicate this article to potential participants of the future transformation processes in the banking and financial spheres.
PSD1 has just built legal framework, creating payment institutions, however, it did not bring enough innovations and competition increase. The 2018 is going to be a year of the PSD2 changes. PSD2 brings interactions between new innovative providers: PISPs (Payment Initiation Service Providers), AISPs (Account Information Service Providers) and AS PSPs (Accounting Servicing Payment Service Provider). EU lawmakers want to increase competition and take out most “red tapes” (Rohan 22). Participants just need to “take this train” and benefit as much as possible.
The last researches are full of new coming recommendations on how to pass this transient period, what opportunities and threats it brings. According to the Deloitte research, PSD2 is going to bring changes in four main areas:
- Range of transactions
- Scope of stakeholders
- Access to information and security
Third Party SPs and the FinTech sector appears as the obvious “winners” from PSD2 (Deloitte 5):
Source: Deloitte (2016). “The early bird catches the worm”: anticipating the challenges and opportunities of PSD2
Those, who can offer a bigger range of services gonna raise its margin and win in this high competitive market. PSD2 introduces new security requirements too, which will help to protect digital transactions. All EU banks are required to open their APIs and clear out the banking activity. Financial organizations need to be able to adapt to the nowadays turbulent environment.
Accenture (12) mentions among the strategic options that “access with APIs to additional customer data in relation to non-payment accounts, customer demographics, identity documentation and direct debit mandates is entirely optional.
There is expected an obvious increase of the direct debit and other alternative payments’ sections; analytics forecast that by 2020 payment revenue from direct debits & other alternatives will increase up to €44 billion that will be in 2 times more than revenue from cards payments (A. T. Kearney 5).
Open Banking and free digital ecosystem will positively optimize customer control, driving forces and the advancing technology (Innopay). PSD2 will cut out a long chain of mediators, who take extra fees, that will make direct debits more popular and simplify numerous payment procedures.
To summarize, the coming changes will mean numerous opportunities of the API integrations, raise of competitiveness in the banking and payment sectors, mediators’ extinction and increasing of active use of digital technologies. Applying to the SDK.finance can solve the new upcoming issues and complete all the transformations and additions in a fast way.
A. T. Kearney (2013). European Payments Strategies Report: Winning the Growth Challenge in Payments. Retrieved from https://www.atkearney.de/documents/856314/1545047/BIP_Winning_the_Growth_Challenge_in_Payments.pdf/49ecf6a4-66d4-4a48-a7ac-dd5ad999da56
Accenture (2016). Accenture Payment Services: Seizing the Opportunities Unlocked by the EU’s Revised Payment Services Directive (PSD2: A Catalyst for New Growth Strategies in Payments and Digital Banking). Retrieved from https://www.accenture.com/t20160518T092811__w__/us-en/_acnmedia/PDF-19/Accenture-Banking-Opportunities-EU-PSD2-v2.pdf
Deloitte (2016). “The early bird catches the worm”: anticipating the challenges and opportunities of PSD2. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/financial-services/Banking/lu_challenges-opportunities-psd2.pdf
Innopay (2017). Kundenkontrolle aus Sicht von „User Experience“ und „User Interface“ (UX/UI). Retrieved from https://www.innopay.com/blog/kundenkontrolle-aus-sicht-von-user-experience-und-user-interface-uxui/
Rohan, P. (2016). PSD2 in Plain English. Rohan Consulting Service Limited, Dublin, pp. 23 – 66.