Whitepaper | How PSD3 Regulations Could Close the Gap Between Implementation and Actual Adoption
19 January 202218 January 2022 | Insights
In our latest whitepaper, we look at the future of instant payments and open banking as we discuss the EU’s Payment Services Directives, from the disruption PSD2 brought to the market to our expectations about the PSD3 regulations.
Everything you need to know about the PSD2 timeline. The primary goal of the directive was to enable a single integrated market for payment services, through the regulation of banks and fintech payment service providers.
What should the European banking market expect from the new PSD3 regulations?
The upcoming update to the Payment Services Directive, or PSD3 as it may be called, could address the regulation issues and other concerns associated with PSD2 and amend them to suit better the needs and capabilities of the various participants in the payments industry. The more streamlined sharing of customer data with TPPs could enable traditional banks and all involved parties to embrace the many opportunities offered by an open banking system. This will enable them to serve their customers in ways never imagined previously.
Could PSD3 eliminate fragmentation and solve issues like API standards and API performance KPIs?
APIs are the technological medium that allows banks to connect their payments and data services to third-party providers (TPPs). This underlines the importance of APIs in fulfilling the core intent of PSD2. Some countries, like the UK, Germany, France, Sweden, and the Netherlands, have achieved substantial growth in the TPP ecosystems since 2018, while other countries are tech laggards.
Fortech Partners with Banks for Their Digital Transformation
Even within the EU’s most advanced markets, several banks still do not have clear open banking strategies and view it from the regulatory compliance perspective rather than recognizing the commercial benefit. The quality and reliability of APls differ significantly too, depending on whether open banking is perceived as a regulation or a revenue-generating opportunity.
We look forward to the PSD3 regulations. It will not only promote a level playing field for all market participants but will likely also explain technical specifications and requirements in greater detail.Fortech