This article first appeared on CBR Online
PSD2 creates opportunities for new bank consortiums and partnerships to form and it’s up to the key players to determine their roles and leverage these partnerships.
2018 is set to be a game-changer for retail banking in the EU. The Second Payment Services Directive (PSD2), which took effect on January 13th, has the potential to disrupt every aspect of the industry.
While there are understandably apprehensions about the outcomes of this new regulation, like its predecessor PSD1, PSD2 is likely to catalyse innovation and startups. Ten years from now we will no doubt look back and see it as an enabler, for unicorns and for transformation of firms which are already well-established. All key players will ultimately benefit from it.
The Drive to a Single Digital Market
For a start, PSD2 will drive the European Economic Area (EEA) towards a single digital market with a common structure and legal framework as the basis for receiving and making payments.
Though the regulatory framework mandated by PSD2 will mainly impact online, we are already seeing retailers in the Nordics having to adapt their in store environments to support both card and instant payment at the checkout. In Sweden, just 1% of the value of all payments were made using coins or notes in 2016. Small retailers make use of home-grown portable technologies which enable everyone, including market traders and charity workers, to take payment cards easily. In Norway, MobilePay boasts more than 3.5 million users and is installed on 90% of consumer smartphones in Denmark—making it the country’s most popular app after Facebook and Facebook Messenger.