The European Commission’s revised Payment Services Directive (PSD2) will bring about one of the biggest changes that the banking sector has ever faced. However, as the Commission has indicated this is not a change being dictated by banks; it is a reaction to the ongoing disruption of payments in the digital age.In the words of the Commission, PSD2 “seeks to improve competition by opening up payment markets to new entrants, thus fostering greater efficiency and cost-reduction”. In fact, the payment market has been opening up to new entrants for quite some time – companies such as Xoom and Trustly, who provide payment services that occupy the space between the customer and their bank, are well established.
It has long been recognised that fintechs’ innovative technology and customer service models have the ability to add value to the market, but in order to get the most out of many of their innovations, these firms need wider access to data about a customer and their transactions – more than they hold themselves. PSD2 makes this sharing of customer information possible.
Sourced through Scoop.it from: www.bobsguide.com