PSD2 Rewrites The Rules on Mobile Payments

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Introduction to PSD2

This post PSD2 and impact on mobile payments is about the coming PSD2 and its impact on mobile payments across the European Union.  It will take effect on January 13, 2018.  It will, indeed, have a tremendous impact on how merchants process electronic payments using a banking card because it aims to make banks open access to their servers. 

Indeed, the new directive will affect the relatively new electronic mobile payment industry like nothing ever before it. As the article "PSD2-A Game-Changing Regulation" points out, virtually all new regulations since 2008 have focused on tightening the banks' business and operating models. Essentially, they are trying to avoid a situation like the world economic collapse that happened that year.  Also, they are endeavoring to win back the trust of their customers.  Certainly getting people to trust the banks enough with their money to securely use the banks to transact business--such as payment of rent and energy bills, and other such expenses--will be key to getting more people to use banks and more advanced systems of mobile payment.  Today these methods are not more widely used because of concerns about security.  For concerns still exist about Internet hacking.

Purpose of the New Rules

What the purpose of the new rules is, according to Tom Hay, is that it will "require banks around the European Union to open their infrastructure up to third-party financial service providers." What this means is that it will open such markets as Google, Apple, Facebook, and Amazon to introduce millions of Europeans to idea of using their bank accounts to pay bills. 

One of the main reasons these service providers will win, say proponents, is that this system will process and post payments faster.  For the faster a payment posts, the sooner the payer gets credit for paying the bill.  For indeed, a payment that takes almost forever to post is like one that has never happened. That is the whole reason that mobile payments, including payments made through a bank, have become an idea to begin with.  Neither the company nor the consumer feel they should have to wait.

Consequences

Because of all these changes, the consumer wins because payment service companies will be able to offer their services at a lower rate.  This reduction in transaction costs will attract more consumers who do not want to continue to pay bills the old way.  Also, as payment companies continue to address security concerns, this will also attract people who otherwise would not use this method of payment. In addition, more merchants will accept this method of payment.  Indeed, watch for changes in the way merchants accept payments the more secure they become.

Netclearance's line of products aims to meet the need for increased electronic ways to fulfill financial obligations that will be timely and secure as technology continues to change and we continue move away from the old way of presenting our utility companies and landlords with cash and traditional cards.