The adoption of the revised Payment Services Directive, PSD2, in January 2018 first set the stage for Open Banking in Europe. Since that time, Europe has had a unique legal framework for Open Banking (OB). Key points are as follows:
PSD2 lit the fuse for borderless Open Banking. It regulates new types of trusted payment service providers, TPPs, and the right to access payment account data (XS2A) through open API sets. Now banks are not the only ones to have access to consumer’s bank accounts …
- Payment Initiation Service Providers (PISPs): With explicit customer permission, PISPs may now initiate a payment transaction directly from the customer’s bank account.
- Account Information Service Providers (AISPs): With explicit customer permission, AISPs can now consolidate customer payment account details from multiple banks in one portal.
- From 31 December 2020, strong customer authentication (RTS SCA) for payments will be mandatory. SCA implementation is currently a key challenge for the payments industry, with the UK granted an extension until 14 March 2021. Other countries may also receive extensions.
- Open Banking allows for the development of new services that did not exist previously, such as non-bank payment initiation, account information services, and personal finance management across banks.
- Although initial adoption has been slow, with the UK leading the pack by publishing its own framework and creating an Open Banking Authority, many countries and banks are now joining the fray across Europe – from Germany, Luxembourg and Italy, at a country level, to the dynamic Berlin Group of more than 40 individual banks.
- Open Banking apps will eventually be the new normal, especially since Open Banking has been a key driver behind the development of highly successful Payment Initiation Services (PIS) like Trustly and others across Europe in recent years.
Individual country profiles in PCM’s Digital and Card Payment Yearbooks provide background for unique OB initiatives in all European countries, as well as information on how banking apps are being combined with payment services. Examples include new Open Banking products in the UK, Italy, Germany, Sweden and elsewhere.
Pushed by digital challenger banks and consumers that embrace Open Banking apps, large banking groups are cooperating with Trusted Third Party (TPP) partners. Open Banking is going to reshape the European banking and payment landscape and, ultimately, the market position and role of banks in the banking ecosystem.
PCM’s Digital and Card Payment Yearbooks provide a comprehensive, up-to-date picture of the payment services and card issuing, acquiring, and processing business across 43 countries plus pan European and Eurasian overviews and more. The reports are recognised through the payments industry as the most authoritative source of cards and payments business information on the European and Eurasian payment markets.
The report comprises two volumes – Volume 1 covers payments statistics of the 33 European countries and Volume 2 contains the Eurasian payments statistics on 10 countries. The European Payment Cards Yearbook 2020 and the Eurasian Payment Cards Yearbook 2020 are available to purchase as complete volumes or individual country profiles.
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