What do PSD1 and PSD2 mean and why are they important?

12-Oct-2018 12:32:27

hu Olvassa cikkünket magyarul  | gr Διαβάστε το άρθρο στα Ελληνικά

PSD1 opened up the European banking and financial services market 9 years ago.

Also known as the Payment Services Directive 1, it is a European Union directive designed to regulate payment services and payment service providers in all EU and EEA Member States. The proposal was signed in November 2009 and came into effect the following month. Its objective is threefold: to stimulate competition on the European continent, improve the quality of services and protect consumers.

PSD1 Since its creation, has allowed 3 things:

  • It introduced the standing of payment service provider and the regulatory format that allows new non-bank companies to carry out financial transactions. In the past, only banks and central banks or government agencies provided payment services.
  • Banks and other payment service providers are required to be transparent about their services and fees, including maximum payment execution times, fees and exchange rates.
  • It has accelerated the development of SEPA as a single euro payment area to facilitate the execution of payments.

Thanks to the PSD1, European customers, whether private individuals or companies, can benefit from faster and cheaper payments in the EU and the EEA. The PSD1 has also led to the emergence of a whole new generation of companies, which has had a positive influence on the banking and financial services sector. These companies, also known as "FinTech" (for "financial technology"), take advantage of technology and online platforms or mobile applications to offer consumers new services, better experiences and lower prices.

iBanFirst was one of the first FinTech companies to obtain a license to act as a payment service provider under the PSD1 in Belgium in May 2013.

PSD2 paves the way for new account information and payment initiation services.

PSD2 is the revised version of PSD1 and was launched in January 2018. This second directive goes further and paves the way for important changes in the banking and payments markets. PSD2 allows innovation by creating two new payment services.

  • The status of "Account Information Service Provider" (AISP) allows new actors to access account information, including balances and transactions, for one or more accounts and one or more banks.

en-asip-750x220

  • The status of "Payment Initiation Service Provider" (PISP) gives new actors the possibility to initiate payments on behalf of the payer. Instead of initiating payment from their bank, the user can initiate payment via the PISP, which in turn transmits the instruction to the bank.

 

en-pisp-750x360

PSD2 has the potential to change and significantly improve the banking and financial services experience. New players will be able to allow their customers and users to consult their accounts and initiate payments. This is already the case in B2C for individuals, with account aggregation services, such as Bankin in France, Figo in Germany and Tink in Sweden, as well as payment initiation services, such as Linxo in France, Satispay in Italy and Fintonic in Spain.

B2B actors reacted more slowly than B2C actors. Companies have not yet seen the benefits of PSD2 and the new AISP and PISP status.

At iBanFirst, we are proud to be the first payment service provider to obtain the AISP and PISP status in Belgium in July 2018. These two new statuses open up new opportunities for iBanFirst to develop and bring to accountants, treasurers and financial managers an experience similar to that they have with their own banking and financial services.

Get real-time exchange rates instantly

Topics: PSD2 AISP