Understanding PSD2 Impact on Payments Infrastructure

2018 is a game changer for retail banking as the PSD2 regulations become active. For those who have no idea what PSD2 is, well, PSD2 (Revised Payment Service Directive) enables both businesses and consumers to use third-party providers to manage their finances. In other words, soon, you will use Google or Facebook to pay your bills, analyze your spending, making P2P transfers while still safely moving your money into your current bank account.

This development will enable third parties to build financial services on top of banks. However, banks are still obligated through open APIs (Application Program Interface) to provide these third parties with access to their customer's accounts. PSD2 will have various impacts which may include:

Improved customer experience

The impact from PSD2 is significantly notable. For a professional indication on how the payments sector should operate, it will have long-term consequences for the broader banking sector. It will also grant opportunities for both existing banks and new start-ups to improve customer experience around financial decisions.

Architecting infrastructure

PSD2 will lie on top of a bank's existing banking applications and process API calls to and from account information service providers (AISPs) and payment initiative service providers (PISPs). These new divisions of the organization will replace the card schemes in managing requests for payment and reporting from customer accounts.

Security technology, and its perception

Naturally, for PSD2 to work, safety is always stronger than ever. Crucially, it is also tighter so as to solely to instill confidence in the open API process. PSD2 adds facial, voice, and retina recognition systems in addition to the already existing PIN and password codes. Contact us today for more information.