Banks Dreading The Real-Time Payments Challenge – Real-Time Payments A Major Challenge For Banks |

Banks may not like it, but the demand is here for faster payments — from businesses, consumers and regulators alike. While they’re apprehensive about the technology, financial institutions are facing pressure to adopt real-time payments capabilities to meet that demand and to comply with new regulations.

In Europe, the driving force behind faster payments is the revised Payment Services Directive, or PSD2, which now includes third-party payment players under its scope. The legislation includes mandates for capital holdings, indemnity insurance, payment data access, security and, of course, access to faster payments.

But between PSD and PSD2, the demand for faster payments began to evolve into a demand for same-day and real-time payments. According to Dion Global Solutions, which provides banks with software to maintain compliance with regulations like PSD2, FIs aren’t exactly ready for this next phase in payments speed.

“Financial institutions are still a little wary about real-time payments,” said Dion Chief Technology Officer Andreas Wagner and Global Head of Financial Messaging and Workflow Jürgen Dahmen, who offered their joint input on the push for payments speed.

The executives said regulators have made real-time payments capability an inevitable requirement, whether banks are happy with that fact or not.

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Revolution in European payment transaction market highlighted in Deutsche Bank report as new regulation looms ahead

The clock is now ticking on implementation of an EU Directive of profound importance to Europe’s financial institutions, their corporate customers and consumers.

European banks and payment providers will need to adapt their systems and processes to comply with the requirements of the new EU Directive on Payment Services Directive 2 (PSD2)

A new white paper published by Deutsche Bank, in collaboration with PPI AG comprehensively explains the most important provisions of PSD2, as well as covering the directive’s impact on the operations of payment service providers and corporates.

PSD2 is a major update of the EU’s first Directive on Payment Services published in 2007 which laid the legal foundation for the creation of an EU-wide single market for payments.

Applicable from January 13, 2018, PSD2 aims to bring EU regulation up-to-speed both with the step-change in technological development and the shake-up of the payments market that have occurred since the first directive came into force.

The European payments market has undergone a metamorphosis in recent years, thanks to several factors. For example, non-cash payments have consistently been increasing as a proportion of total payments, totalling 112.1 billion payments in the EU in 2015, an 8.5% rise from 2014.

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Welcome to Euromoney

The World Payments Report, which was published by BNP Paribas and Capgemini in September, surveys banks on their reactions to the implementation of new regulation. While the regional regulations understandably have a higher impact in their home markets, global rules seem to be having an unbalanced impact around the world. The WPR unsurprisingly showed that the Single Euro Payments Area (Sepa) was having a moderate impact on Europe, but was not an issue in the US or Asia. Equally, Payment Services Directive II (PSD2), implemented by the European Commission, is having a significant impact in Europe, but not being felt in other regions. The US, however, is taking a far tougher approach towards payments security and technology than Europe and Asia.  For example, the New York State Department for Financial Services is implementing cybersecurity regulations that will require institutions to develop a programme to address 12 aspects cyber threat covering data security and management, identity management and disaster recovery plans.  

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Preparing for PSD2 and Open Banking

The EU’s Directive on Payment Services 2 (PSD2) will accelerate the fragmentation of Europe’s retail banking industry following the global financial crisis. The opportunities brought about by PSD2 will energize banks with strong brand awareness and advanced digital offerings into pushing the boundaries of open banking. Increased competition from card issuers and non-bank third-party providers will prompt steady mid-cap players to fundamentally evaluate their strategies. Banks that are competing on price may see a future in collaborating with third parties, but in doing so will relinquish control over their customer relationships. Whichever path is chosen, the opportunity to offer, create, or co-create new products and services much more quickly is a positive change for the industry.

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EBA launches consultation on draft guidelines on the criteria for minimum amount of professional indemnity insurance under PSD2 | Lexology

The revised Payment Service Directive (PSD2) includes a requirement for providers of payment initiation services and account information services to hold professional indemnity insurance (PII) or a comparable guarantee against specified liabilities as a condition for their authorisation or registration.

In line with its obligations under PSD2, on 22 September 2016, the European Banking Authority (EBA) issued a consultation on its draft guidelines on the criteria which competent authorities should consider when stipulating the minimum monetary amount of PII or comparable guarantee to be held by such providers.

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Abstract Banking Promises a New Era of Customer Choice

Open APIs could revolutionise the banking sector providing customers with more choice and flexibility while increasing competition between banks and lenders. Just as comparison websites enabled customers to find the best products and thus disrupted the high street banks, APIs could empower customers to compare and switch products in a much more seamless manner, further weakening the hold of the established banks. If this happens, it is vital that customers remain in control of their data and have a clear understanding of how to use it. They need to understand who they are sharing their data with and for what purpose it will be used.

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Navigating regulatory change

Corporate treasurers in Europe could be forgiven for thinking that the post-crisis avalanche of regulatory change must, by now, have run its course. From Basel III to SEPA, the last few years have been characterised by a significant number of new regulations. However, there is plenty more yet to come – and treasurers should have a thorough understanding of the upcoming changes in order to stay ahead of them.

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PSD2 RTS On Authentication And Communication | The Devil Is In The (Lack Of) Details – Finance and Banking – UK

Following the entry into force of the revised Payment Systems Directive (PSD2) on 12 January 2016, in August the European Banking Authority (EBA) published the draft regulatory technical standard (RTS) to define how, in practice, Access to Accounts for Third Party Providers (TPPs)1 and enhanced security and authentication requirements, two key pillars of the directive, will be implemented.

In this article, we explore some of the major implications for the payment industry, and banks in particular.

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PSD2: Risks and opportunities

Capgemini explores the business risks and opportunities for banks arising from the forthcoming implementation of the EU’s revised Payments Services Directive.

PSD2 enforces an implementation deadline of January 2018. For those banks already progressing in their digital transformation, this is a reasonable timeframe to incorporate the nexessary technology and business change. For those that have yet to embrace digital, key components of a digital infrastructure are needed and time is short.

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Should SA be writing its own PSD2 regulations? | TechCentral

Europe’s Payment Services Directive 2 is expected to come into force in January 2018. With some banking industry commentators referring to it as the biggest development in banking history, one has to wonder why South Africa has not already begun to follow suit

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