While the implementation deadline of the EU Payments Services Directive (PSD2) now looms large (13th January 2018), the majority of member states are yet to transpose PSD2 into national law, while a number of Guidelines and Technical Standards, drafted by the European Banking Authority, remain in consultation. Clearly, this uncertainty creates challenges for banks tasked with becoming PSD2-compliant. In this video with The Banker, Christian Schaefer, Head of Payments, Corporates Cash Management, suggests that, given the clear benefits to clients, banks should not delay deploying PSD2-related changes – and should instead participate in the consultations and act on the early drafts of the Guidelines
In the interview, Schaefer explains key areas of uncertainty surround the opening up of payments infrastructure to third-party providers and two-factor authentication; with the requirements for both depending on one Technical Standard which will only become effective in 2019. Again Schaefer stresses that inaction should not be an option. Indeed, related regulatory requirements surrounding the provision of access and the taking of liability for transactions will become effective in 2018, and will need to be addressed by banks regardless of the progress on the aforementioned Technical Standard.
Schaefer is keen to stress that PSD2 brings as many opportunities as challenges, resulting from the innovative eco-system flourishing around third party access. As a first step, this will mean value-added services for retail customers, but in time will also likely mean emerging services addressing the needs of corporate customers.
More broadly, he suggests that, given that PSD1 formed the legal basis for the Single Euro Payments Area (SEPA), PSD2 could be regarded as the legal basis for a new SEPA, with an extended remit to all payments in all currencies. Moreover, he believes that the Application Programming Interface (API) momentum now seen in payments will carry over into other banking services. It therefore signifies a chance for banks to future-proof themselves in a rapidly-evolving landscape.
To watch the video click here.
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