Happy New Year!
For our first blog posting of 2018, we are going back a few weeks to an article that was released at the end of 2017 talking about what's in store for 2018 with the implementation of PSD2 (Payment Services Directive) in Europe.
In case you missed it, with all the fun you were having between Christmas and New Years, our Chief Product Officer Ferhan Patel was interviewed by PYMNTS.com regarding his views on Opening Banking and the changes in store for 2018.
What is PSD2?
PSD2 is the second Payment Services Directive is an EU Directive to regulate payment services and payment service providers throughout the European Union (EU) and European Economic Area (EEA). The Directive's purpose is to increase competition and participation in the payments industry from non-banks.
Banks will be obligated to provide 3rd party providers access to specific customer information via open APIs enabling 3rd party companies to build financial services on top of banks’ data and infrastructure. Banks will no longer only be competing against other banks, but everyone offering financial services.Here is an excerpt from the article below:
"Ferhan Patel, co-founder and chief product officer at Payment Rails — another company that uses APIs to facilitate business payment — recently told PYMNTS that this trend of banks opening up their data to third parties will “absolutely” continue into the new year.
“2018 is going to be a game changer in Europe with the implementation of PSD2,” Patel said. “Open banking allows innovative third parties to build financial services on top of banks’ existing infrastructure and offer a better user experience and access to more information.”
But regulation is only one part of the push for banks to open up.
“Banks can either continue status quo or realize there is a shift in demand from consumers that will be fulfilled through FinTechs or various other third parties,” added Patel.
You can read more on PSD2 and Payment Rails at https://www.pymnts.com/news/b2b-payments/2017/open-banking-api-data-sharing-2018-predictions/