PSD2: More a “future of banking” than a payment directive
For some organisations Sopra Banking is predicting a decrease in the revenue generated by banking services and payments by up to 20% over the next five-year period.
The Revised Directive on Payment Services (PSD2) is an update of the European regulations set out in the 2007 Directive on Payment Services (PSD). The Revised Directive came into effect on 13 January 2016 with an applicable two-year transition-period before provisions come into force on 13 January 2018.
According to Sopra Banking, PSD2 is forcing market players to take a hard, strategic think. The new report drawn up by Sopra Banking attempts to analyse and quantify the impacts of PSD2 on the income generated every day by banking services.
The reactions to PSD2 are extremely varied to say the least. A Tier 2 Payments Director has been heard to exclaim, “access to accounts? Impossible!” (in 2016 no less!), whilst others such as BBVA are paving the way with a series of APIs inspired by PSD2 and a free market. To a certain extent, the varied nature of these reactions shows a poor understanding of the Directive, as well as what it means for the European banking sector.
Many businesses are concentrating on the finer details of the regulation but aren’t seeing the key issues. Given the importance of the changes yet to come, minimal compliance with the regulation is a choice taken at their own peril. Financial organisations need to revise their strategies now so as not to miss the perhaps short-lived opportunity to act further down the line.