How banks should act now to build state-of-the-art APIs for PSD2 and beyond

On 13th January 2018, the second Payment Services Directive (PSD2) came into force, defining a new chapter in the European payments market. It requires banks to open their systems to third parties and provide interfaces to them to initiate payments on accounts, retrieve account information and a confirmation of availability of funds on accounts. Application programming interfaces (APIs) play a vital role and standardized APIs are required to avoid fragmentation in the European market, and promote the digital ecosystem. PSD2 does not come with an API standardization. To help fill this gap, the Berlin Group—consisting of almost 40 banks, associations and PSPs from across the EU—has defined a common API standard called “NextGenPSD2”, which provides guidelines to reduces XS2A complexity. It is ready to be used by banks and TPPs for implementing PSD2-required bank account access.

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