In 2018 PSD2 enables EU and EEA bank customers, both consumers and businesses, to use third-party providers to manage their finances. In other words, if the user consents, other companies than a user’s bank will be able to do things previously reserved for banks. This means that potentially, you may be using soon Facebook or Google to pay your bills, making transfers to friends and analyze your spending, while still having your money safely placed in your current bank account.
Banks are obligated to provide these third-party providers access to their customers’ accounts through open APIs (application program interface). This will enable third-parties to build services on top of banks’ data and infrastructure.
This means that banks will no longer be competing only against other banks, but everyone licensed to offer financial services. PSD2 will fundamentally change the payments value chain, the use of account information, what business models are pro table, and customer expectations.
Through the directive, the European Commission aims to improve innovation, reinforce consumer protection and improve the security of internet payments and account access within the EU and EEA.
