PSD2: ‘Wind already taken out of sails’ of open banking

By Anna Fedorova

PSD2 was intended to revolutionize the world of transactions by allowing banks’ customers to use third-party providers to manage their finances, placing an obligation on banks to offer these third-party providers access to customer accounts, with permission, through open application programming interfaces (APIs).

The European Commission’s aim was to improve innovation, reinforce customer protection, and improve the security of internet payments and account access within the EU and European Economic Area, as well as promoting competition in the market by breaking the stronghold of incumbent banks.

Yet only two quarters after the January 2018 implementation date of PSD2, “some of the wind has been taken out oits sails”, according to online payments company Paysafe.

Andrea Dunlop, CEO of acquiring and card solutions at the fintech firm, says: “There is still an unshakeable belief in the payments community that PSD2 will have the impact it is earmarked to eventually, but progress since the implementation date has been slower than expected. “Perhaps now a new approach is needed.”

One of the key problems Dunlop sees with the regime as it stands is the lack of incentive for banks to move beyond the minimum requirements of the legislation.