With the PSD2, Payment Service Directive 2, the European Union expressed itself at the beginning of 2018 on a directive, concerning digital payments, which will have to be implemented, and for which we will have to be ready by September of this year. The latter will probably be remembered, among other things, as the year of open banking. For the first time, banks will have to open their own API (Application Program Interface) to companies belonging to Fintech and to other companies of financial products and services that will allow third parties access to payment data. In a nutshell, with the PSD2, is intended to introduce more competition in the payments market, a traditionally dominated by banks, giving greater openness to bank account information.
But what are the potential advantages, scenarios and opportunities related to PSD2? Well, surely an objective linked to this regulatory framework is to strengthen the security of payments in e-commerce, and not only, without hindering the flow of purchasing paths that must remain unimpeded for end customers, simultaneously opening the road to market entry of new players.
Still on the subject of security, PSD2 provides for the use of rigorous standards for access to the Customer Area (Internet Banking) and for the provision of online payments, and strong authentication will be required (strong customer authentication). Strong authentication or two-factor authentication is a security system that uniquely identifies and authenticates the customer and the transaction, reducing the risks associated with accessing their online accounts and performing fraudulent transactions by unauthorized third parties. In fact, this includes not only entering a user name (or e-mail) and a password, but a second element (such as a code sent via SMS to the mobile number) will also be required to confirm an online payment. In addition, the European Banking Authority (ABE) has made the drafting of a public electronic register mandatory in which all TTPs (Third Party Providers) authorized to operate payment services in the EU within the PSD2 will be listed. In this way, every consumer can check if the financial player to be authorized is present in the register and in this way will have the security of providing access to their bank data and payment transactions exclusively to certified bodies that are actually approved at a regulatory level.
Also for consumers the introduction of PSD2 offers a number of advantages such as, for example, an improvement in the customer experience and the elimination of any surcharge for those who use digital payment systems. The directive also offers end users greater opportunities to choose also in the right to use services other than those offered by banks, or third parties or TTPs, to carry out payment transactions, but also to request loans or make investments.
Account management for individual consumers will also change in the sense that, if at the moment you have two or more bank accounts with different banks, you can only examine them and manage them separately because the two systems are incompatible. Thanks to Open Banking, you will instead be able to aggregate and manage the cards on a single dashboard even if you have two accounts on different banks and tools will be enabled that analyze the behavior of spending, find competitive offers for services and allow you to move money from one account to another with a click. Finally, one of the values and challenges of the PSD2, is linked to the ability to take advantage from data: from those of the customer to those of the context in which he carries out his operations and therefore here digital payments come in force in the Big Data area. Perhaps, and also in this sense, the value of the new directive is in the invitation to all actors to focus attention on customer awareness in a competition that must transfer this knowledge and these opportunities to the final consumer.