New regulatory framework for payment services in 2018

What does this mean for your company?


The Revised Payment Services Directive, called PSD2, will be introduced on 13 January 2018. This is an EU directive aimed at regulating payment services in the EU and the EEA.

PSD2 is a continuation of PSD1, which was implemented in 2009. The purpose of the directives is to promote an innovative, effective, well-functioning and common European market for payment services for both businesses and private individuals.

“The introduction of PSD2 will lead to a wider offering of payment and account-related services, which will benefit customers. They will experience significant innovation, added value and more efficient payment processing in Europe,” says Anders Grevstad, head of Transaction Banking in Large Corporates and International in DNB.  

What is PSD2?
Through PSD1, it became possible for non-banks to offer payment services. PSD2 will make the banking infrastructure even more accessible to third parties that want to provide payment-related services. Banks must, if the customer so wishes and agrees, give authorised third parties access to the customer’s account information and transaction history. These can be both competing banks and other institutions. These service providers will also be able to initiate payments on behalf of customers directly from the customer's account.

New roles in the payment value chain

PSD2 will introduce new roles in the payment value chain:

1. "Payment Initiation Service Provider" (PISP)
A business that is authorised as a PISP can initiate payments from a bank account based on an agreement with the account holder without a prior agreement between the PISP and the account servicing payment service provider.

2. "Account Information Service Provider" (AISP)
A business that is  authorised as an AISP can aggregate data on payment accounts in several banks without prior agreement between the AISP and the account servicing payment service provider. The purpose of this may be a presentation or sophisticated analyses where these data are only one of many factors included in the analysis.

In order to facilitate information exchange, banks must develop standardised interfaces (Application Programming Interfaces, APIs) that all approved players will be able to easily connect to in order to exchange information.

“Banks as well as new players are competing to develop new and innovative payment services that are both faster, more user-friendly and more cost-effective for customers,” says Grevstad.

Positive for corporate customers
PSD2 will create new opportunities for companies that operates within the European Economic Area:

PSD2 will lead to increased competition and innovation within payment services. New and more efficient payment solutions will be developed. Parallel to this, transaction and account information will be made more accessible. This will improve companies' liquidity management and risk management.

For the largest corporate customers,  PSD2 can help remove friction between banks and customers' systems. Banking services can be even more closely integrated with customers' own systems, giving them an even better overview of their overall financial position across all banks. For smaller companies that do not have comprehensive systems themselves, cost-effective services and solutions will be developed to aggregate and automate accounting and banking information. The companies will then be able to effectively handle and keep control of various bank connections throughout Europe in a way that was not previously possible due to too high costs.

Simpler and more standardised data exchange between banks and companies may result in significant efficiency gains for both parties. The reconciliation and compilation of banking and accounting data may be further automated, companies will gain access to more extensive information in real time, and it will be easier to compile important management information for decision makers.

“We will, as a dominant player in this market, actively participate in these changes in order to facilitate new and better solutions in 2018. We want to build on the new infrastructure to be able to offer our corporate customers the best and most value-added services in the market. DNB has broad expertise within payment services and will be happy to discuss issues relating to PSD2 with its customers,” concludes Grevstad.