Payment Services Directive 2 – What will change?
Nowadays, it is totally natural to deal with our private banking online. It is an achievement of digitalisation which makes the life of consumers and entrepreneurs easier. Even simpler and quicker, and thus popular among retailers as well as their customers are payment methods such as the ones being provided for instance by Klarna or PayPal. In the first place, this success was enabled by the first Payment Services Directive. Its implementation effected the creation of preconditions for a Europe-wide market access for payment service providers who now can compete with banks in a market which they have been excluded from before. Without this legislative framework the digitalisation of payment systems could not have proceeded that way.
But what will happen next? Uncounted innovators in the financial sector constantly work out new developments which they want to acquire the customers of the regular banks with. Will banks be redundant? Rather not. But their role will change even further, when the possibilities of payment service providers will be newly specified and manifested by implementation of the second Payment Services Directive (PSD 2) in 2018. Then banks will have to provide standardised interfaces between their customers' accounts and external payment service providers in order to ensure that these can provide their services freely and efficiently. With access to these accounts, not only the account-holding bank itself, but any service provider who has been granted an according license, will be able to make payments and retrieve account details. In order to safeguard the necessary extent of data protection and to prevent money laundering and fraud, safe and strong authentication methods shall be used.
Hence, by the implementation of PSD 2 the stage between account holder and account-holding bank will become marketable and the innovative FinTechs will confront the banks even more self-confidently in the competition for customers. However, even the most innovative FinTech with the best business concept needs the customers of banks to succeed. On the contrary, banks want to become more than the service provider of accounts. This constellation will, at best, lead to cooperations which create not only new overlay services, but also innovations in the technical infrastruc-ture of payment transactions – possibly by making use of blockchain technology. Whatever will bring benefit to the service providers as well as to the customers, will prevail.
As PSD 2 shall achieve full harmonisation, the EU Member States must not adopt or maintain any laws or regulations that do not conform with the directive. In Germany, the Federal Ministry of Finance and the Federal Ministry of Justice are currently preparing the implementation of the regulatory part and of the parts of PSD 2 relating to civil law, respectively. Both ministries intend to merge their respective draft laws into one joint draft later on in the process. The European Banking Authority (EBA) currently drafts and will present within short the regulatory technical standards (RTS) for, inter alia, the strong customer authorization and safe communication as required under PSD 2. The European Commission will then adopt the RTS as a delegated act. According to the current drafts, the German implementation of the second Payment Services Directive is expected to take effect as of 18 January 2018. We will keep you posted!
Save article as PDF
Dr Christina Griebeler, M.I.C.L.
Lawyer (Rechtsanwältin),
Advokat (Sverige), Partner
T +49 - 69 - 97 40 12 - 39
M +49 - 172 - 677 53 72