As the first in Denmark, the fintech company Lunar Way has been awarded a PISP license.
Lunar Way also receives an AISP license. The licenses foreshadow a break with centuries of bank monopoly on information and payment services because the licenses commit the banks to allow companies like Lunar Way to build new innovative financial services on top of the bank's data and infrastructure for the benefit of the users.
It doesn't sound particularly gripping - PSD2. Nevertheless, the cryptic name covers a significant paradigm shift, that could potentially fundamentally change the world of banking, as we know it today.
PSD2 is an EU directive that, in short, allows bank customers to use third-party players to get an overview of their finances and to handle their money. The directive thus paves the way for fintech companies, breaking centuries of monopoly on payment services and account information.
Essentially it means that you will be able to pay your bills, transfer money and analyze your consumption through a third party provider, while your money is kept safe in a regular bank account.
To do this, it requires special licenses, and such permits have just been awarded the Danish fintech company Lunar Way, as the first in Denmark.
- We are incredibly pleased to receive the licenses because they enable us to expand and develop our product in brand new and innovative ways, to the benefit of our users in Denmark and the rest of the Nordic region. Among other things, the AISP license will enable us to offer users a complete overview of all their accounts, regardless of the bank the account is registered to. The PISP license allows us to initiate payments on behalf of users. Overall, it the user will be able to manage all of his or her finances through the Lunar Way app, with all its functionalities and focus on a best in class user experience, says Morten Sønderskov, COO in Lunar Way.
Forces banks to share information
The directive has been created to accommodate digitization, which increasingly affects almost all aspects of our daily lives — including the way we handle our money. The purpose of the EU directive is, therefore, to modernize the rules for payments both to account the many new digital payment options, but also to support the competition in the banking sector and increase security.
PSD2, for example, forces banks to share customer account information and share payment service options with other parties - with the customer's consent of course. This essentially means that banks will not only have to compete with other banks anymore but with other providers of financial services.
- The financial world is an area of intense competition where all players - old as well as new - continually develop new solutions. The licenses are an important step on Lunar Way's journey into the financial sector, and the ambition is to radically change the way banking is done today. With the licenses, we can expand our position on the market, while offering our users a complete solution like no other. One that connects their entire personal finance across financial providers, and gives them control over their economy. We're looking forward to that, concludes Morten Sønderskov.
Contributed | what does this mean?