25 September 2017
Carlos Figueredo


Carlos Figueredo - Open Vector Limited

2Posts 12,964Views 5Comments
SEPA and European Payments

SEPA and European Payments

The Single Euro Payments Area, the Payments Services Directive, the Eurosystem, TARGET2, STEP2, the Euro and related matters.

PSD2 - Time for banks to join in or lose out

21 August 2017  |  7059 views  |  1

It is no secret that the PSD2 regulation will open up the playing field to Fintechs and to the creation of  AISP’s (Account Information Service Providers) and PISP’s (Payment Information Service Providers). 

Banks will have to share account information from their clients while PISPs will be able to generate payments on behalf of an end user. While all this is well documented and repeatedly defined, what are the “big” banks doing about it? 

This account information sharing means that banks must give up account information and the transaction monopoly with primarily PISP’s taking a good slice of the pie as it relates to new business. Indirectly it also may present a huge risk for the likes of PayPal and PingIt to survive as other more direct solutions will come about. So the objective here, for the banks and for some Fintechs, is to join in by finding ways to embrace this new payments process and find innovative ways to still be the go to institution or to simply let this new process evolve and take that market share.

On top of PSD2, banks are having to deal with open banking which has also seen them invest in API solutions to conform to this regulation but as I blogged before, the issue is to find a Fintech that is truly experienced, actually understands both and can assist which is a separate conversation. But, for the banks, the issue is the investment on two key regulatory items of which they are also losing market share and with no commercial return on it, so really a double loss. 

I would like to hear from this group what do they see happening to banks as it relates to PSD2 going forward? What will the landscape look like two years from now? Will technology and regulations seize large institutions and how we see and use them today? What services will they end up providing if PSD2 and open banking moves steadily similarly into other sectors like trading, mortgages, wealth management? Some of these might sound far off but if someone would have told you about a Whatsapp, Amazon, or some other service making a payment on your behalf 2 years ago without the need of an account number, IBAN or passwords to several other bank apps you wouldn’t have believed it!!!


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Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 23 August, 2017, 12:13

PSD2 is meaningless without banks. Who is PSD2 telling to open up their customer data?  

Fiserv launched ZashPay / PopMoney, which allowed people to make payments basis email or mobile phone number. This happened 7 years ago. Fiserv unveils P2P payments service. Why is so hard to believe 2 yearsago that you could make payments without knowing the beneficiary's bank account number? 

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Carlos Figueredo
Carlos Figueredo - Open Vector Limited - London | 23 August, 2017, 23:59 Mr KS, Thank you for your reply above. I am slightly confused by your comment on account information as you yourself mentioned PSD2 requesting account information in your Feb 14 2017 post which was about Fintechs not needing a PSD2 regulation. I also was not aware of the Fiserv product so my apologies if my research was not as complete as yours. And my point of two years was meant as a hypothetical reference to the past. Regardless I enjoyed your response and exchange.
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job title CEO/Founder
location London
member since 2017
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As the CEO/Founder of Open Vector Ltd we provide the industry with the only experienced team to deliver an Open API solution across a country banking sector. This experience was gained through the Ope...

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Ketharaman Swaminathan