The PSD2 Directive opens a considerable market for new solutions in e-banking, account information services and payment initiation services.
The PSD2 Directive opens a considerable market for new solutions in e-banking, account information services and payment initiation services.
Open banking can offer opportunities for retail banks that are faced with competition from newcomers to the banking and finance industry. For those unfamiliar with what open banking is, it can be best defined as “the use of open APIs that enable third-party developers (FinTech or non-banking service providers) to provide applications and services around the financial institution.” These services may be located between the customer and the bank, or placed in the bank’s bank-end.
A fundamental objective of the Revised Payment Services Directive (PSD2) has been to reduce the risk of fraud to the maximum extent possible and ensuring security for electronic payment transactions.
Financial institutions and solution providers are busy implementing the requirements of Strong Customer Authentication (SCA) under the Revised Payment Services Directive (PSD2) and the Regulatory Technical Standards (RTS).
In November 2018, ETSI published the new version of standard ETSI TS 119 495 - Sector Specific Requirements Qualified Certificate Profiles and TSP Policy Requirements under the Payment Services Directive (EU) 2015/2366. The standard was expected by financial institutions and trust services to allow secure communication in the context of Payment Service Directive 2 (PSD2).
The Payment Service Directive 2 (PSD2) allows non-banks to provide payment services previously reserved for banks only. As a result, the market of services initiating a payment transaction or getting information about account balance will grow and open for new business models and technologies. The Directive and its implementation standards require all transactions to be handled through secure channels, and all data shall be protected regarding authenticity and integrity.
The 2015 Revised Directive on Payment Services (also known as PSD2) lays the foundation for safe and secure payments throughout the European Union. PSD2 places a substantial emphasis on ensuring that adequate safeguards are put in place to prevent fraud and other unauthorized use of payment mechanisms.
The European Commission adopted the Delegated Regulation on Regulatory Technical Standards (RTS) in November 2017. These standards provide detailed specifications to achieve the strict security requirements for payment service providers in the EU.
