The Revised Payment Services Directive has been working on to build a framework for the Third Party Providers like PISP (Payment Initiation Service Provider) and AISP (Account Information Service Provider) to develop services on top of bank’s data. Open Banking under PSD2 has made it all possible with bringing the focus on access to the account. As a result, banks will not be the only ones with information about transactions, customer’s banking history, as well as his financial position.
Moreover, Banks need to allow TPPs, i.e. AISP as well as PISP to initiate payments from those accounts, based on prior customer consent. Though the Banking industry is not so unwelcoming to the introduction, they feel threatened in the presence of digital giants. Banks so far, operated in a formal infrastructure, therefore couldn’t form a close relationship with their clients. Tech giants, on the other hand have been working as per the requirements of their clients, and as a result have been more close to them.
Though, PSD2 is aiming to introduce neutrality in the overall payment industry; the tech giants have a hold on the customer nerve, which can erode the electronic payments volumes of the established financial institutions.
Now, let’s discuss the institutions who have the possibility to take advantage of the PSD2 regulation and earn
· Fintech companies
· Big tech companies
· Insurance companies
Read the five important steps that the third-party providers need to check in order to become the PISP providers under PSD2 here.