As the leader of Europe’s payments and transactional services industry, Worldline obviously considers the PSD2 as a strategic project. We strive to manage it in a global way, as it impacts both the technical solutions we develop and the economic models we work out for our partners and customers. Those are, besides banks, the whole range of stakeholders involved in the payment value chain, including merchants, fintechs and any potential players named that could be labelled under the new Third Party Provider role. We are careful to avoid a "silo-based" approach that would lead to taking into account each trade individually. We want to take an "omnichannel" approach, based on a services platform enabling the overall exchange flow between players of the ecosystem.
"The PSD2 brings many benefits to the end-consumer."
Since the PSD1 implementation 10 years ago, financial services have moved significantly and new players have emerged. It was therefore urgent to provide a revised regulatory framework to tackle this new situation. The new Directive will also greatly benefit European consumers by making it easier and safer to shop online and enabling new services to enter the market to manage their bank accounts, for example to keep track of their spending on different accounts. This is now settled with PSD2. The Directive is laying down the rules applicable to each member of the financial services community and could become a tremendous stimulus for developing innovative services
"Banks are facing new innovative players."
The market players, primarily banks but also the fintechs or e-merchants associations, did not remain inactive after the publication of the RTS' first draft on February 23rd 2017. They did not refrain from displaying concerns and making proposals that could be read in the May 23rd version. For the banking sector, an institutional industry structured by major established groups acting under the regulation of central banks, the rules of the game will greatly move. The Directive will certainly not prevent them to run their daily operations – financial services, saving products, insurance. It will however enhance competition through the emergence of new players committed to provide innovative services to the customers. To some extent, the "banking product" could become a "commodity", a daily consumer good.
"Fintechs are capable of moving quickly but banks can rely on their client's confidence built over the years."
In the meantime, fintechs are determined to take advantage of the Directive in order to shift the current position lines, in particular to sustain the web-scraping method enabling the utilization of clients’ data made available on information sites. Fintechs highlight their agility and capability to address customers’ requests instantaneously. On the other side, banking institutions may rely on their major patrimonial assets: customers’ confidence on the one hand and capability to manage a massive number of accounts on the other hand.
"APIs will require the banks to bring their historical information systems up-to-date."
The Directive should have a technological impact, at least on two main levels. First, the access and communication protocols with bank accounts. So far, interbank exchanges used standard protocols - such as Swift - that are genuine regulated and bounded data highways. Tomorrow, they will be relying on APIs that banks will have to develop in order to allow new regulated Third Party Providers to interface with their clients’ accounts, therefore compelling them to greatly push forward their information systems. Second, the openness of systems will call for users' strong authentication and secured exchange protocols, able to withstand cyber-attacks and misuse of sensitive data. Therefore, security issues relating to the opening of exchange systems are key, all the more so as the GDPR (General Data Protection Regulation) will enter into force the same year (2018) and will force them to preserve their customers' personal data.
"Instant payments will lead to a better customer experience."
The payment industry is facing changes that will require the development of solutions not only "secure by design" but also meeting "instant payment" requirements, a new service expected by both customers and merchants. This will take place in a context where the act of paying will be integrated in the act of purchase. An improved customer experience could increase the average amount of a client’s purchase. E-merchants are preparing for this through a renewed vision of the customer path, a controlled management of client’s data and an extended use of instant account-to-account transfers.
"Worldline is working on global offers for this global challenge."
This evolution of payment services leads to an increasing use of smartphones, an enhanced utilization of clients’ data and an openness to social networks. It is a kind of "uberization" of the service that will lead players to questioning their strategy and position within the value chain. They will notably have to evaluate threats and opportunities of a cooperative versus competitive relationship with other players in the coming period… In this new context, Worldline is launching offers to embrace these new requirements resulting from regulation, faster processing and new customer journeys. A global offer for a global challenge.