PolskiPSD2 directive
PSD2 Directive Allows Account Data Sharing Among Third Party Providers
THEN PSD directive created a category of Payment Service Providers. PSP institutions are able to manage electronical transactions between merchandisers and buyers, but cannot do much more, like for ex. verifying account balance. This was always a privilege given to banks. It means that previously, only banks were allowed to collect data from their customers’ accounts. When user wanted to make a purchase, he had to be redirected to his bank website or one of the e-wallet services. According to the first PSD directive, the only competition for banks were other banks, but PSD2 directive made a huge change in this matter.
NOW With PSD2 directive in operation, users don’t need PSP to make quick transactions. When buying something online, customer can omit PayPal or PayU and other e-wallet services. If he will give bank a permission to pass the account data directly to the shopping platform, payment will be done quicker than ever before. This comes with creating brand new category of financial institutions, called Third Party Providers (TPP). This group is formed by two kinds of institutions:
- companies allowed to initiate transactions (Payment Initiation Service Provider),
- companies with an access to user’s data (Account Information Service Providers).
It’s on banks to provide access to the accounts information, through a dedicated Application Programming Interface – API.
As a result, thanks to PSD2 directive, there will be more financial institutions, providing miscellaneous methods of payment, security systems and new ideas for managing the savings. This will undoubtedly increase competition in the financial sector.
New Security Rules, Stronger Than Provided by PSD Directive
NOW A user who wants to conduct a purchase, has to type his login and password to access the account. The first PSD directive didn’t require any more actions to be undertaken in order to prove user’s identity.
LATER Security is the main objectivity of the new PSD2 directive.That’s why new identification process has to be implemented. It is called strong customer authentication − SCA. What does it look like in practice? When a user wants to log into his account or pay for the order, he has to confirm his identity at least twice (though there are three possible methods, all independent from one another). With PSD2 directive, authentication is going to be based on:
- something the user knows – like a PIN number or a password,
- something the user possesses – for ex. his phone or credit card,
- something the user is, that is inherent to him – this method requires biometrical scan.
The important thing is, that if the transaction will be conducted without this double security process, money will be taken from the merchandiser’s account. That’s why companies should care about providing a proper safety system. Luckily, there’s still time for these institutions to prepare for the upcoming changes. The European Commission published the Regulatory Technical Standards in the Official Journal of the EU in November 2017. RTS explains how to implement PSD2 directive requirements. It must be applied until 18 months since the day of its publication.
Better Control Over The Finances
NOW Every person who owns multiple bank accounts, has to check them separately to see how much money he has. With PSD directive getting off the stage, managing the money might become much easier.
LATER PSD2 directive constitutes the Account Information Service Provider. It means, customers are finally going to be allowed to see all their accounts’ data, while entering one website. It makes budget controlling nice and simple, and also lets AISPs gain in-depth information about users.
PSD directive was a huge step forward on the way to establishing payment services, but the second directive may be a solution customers need to buy with greater safety. What’s more, it can have a significant impact on the way online shopping is done. With more players in the financial sector, the competition will grow and may result in more comfortable methods of payments.
