PSD2 opens the door to new market entrants
Agility will be key to keeping market position
The newly agreed Payment Services Directive 2 (PSD2) paves the way for significant changes to the payments market. This regulation needs to be carefully considered given its far-reaching impacts on how the market operates and not be treated as a straightforward compliance exercise. As at the end of October 2015, the regulation has been voted on and approved by the European Parliament and will shortly be formally adopted and published. Once this happens, EU Member States will have two years to implement the changes which can therefore be expected to come into force by the end of 2017.
Following the vote to adopt the new Directive, the European Commission highlighted key parts of the new legislation in its press release: making payments throughout Europe safer and more secure, and enabling innovation by allowing new payment services to enter the market.
The drivers behind the regulation are clear: innovation, competition, and consumer protection. These are recurring themes that are being consistently pushed by regulatory authorities throughout Europe, both centrally and within its Member States.
The changes proposed by the PSD2 regulation are far-reaching. Set against a backdrop of increasing Fintech investment, PSD2 now enables many new third parties to participate in a market that has previously not been open to them. Existing players in the payments market must be responsive to the new challenges that this brings.
Inside Magazine - Global edition 2016
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