PSD2 AND API SECURITY WHITE PAPER
2. PSD2 PUTS CHANGE AND OPPORTUNITY IN THE HANDS OF PSPS The payments industry has needed updating for a long time, and PSD2 makes change a reality. Open banking, perhaps the directive’s most revolutionary initiative, enables third party access to account information and paves the way for greater innovation and competition in the market through open APIs. PSD2 and the open banking initiative move the payments industry forward in two very large strides:
CREATING A LEVEL PLAYING FIELD
SECURING THE PLAYING FIELD
All PSPs active in the EU will be regulated and
The introduction of open banking is a big red
answerable to relevant rules set out by PSD2.
flag for PSPs to ensure their houses are in order.
This creates a level playing field that makes it
Systems and infrastructure must be up to date and
possible for new entrants to make their mark in
open APIs in place to facilitate third party access
the payments market and a new environment for
requests; the ability to initiate online payments
consumers using payment services.
directly from a customer’s account.
Consumers will be able to use Payment Initiation
APIs put control in the hands of TPPs. They can
Service Providers (PISPs) and Account information
use a bank’s API to deploy their own solutions
Service Providers (AISPs) to manage multiple
for businesses and customers, which can be
accounts, data and make comparisons.
integrated with data held by the bank.
Securing customer data is vital. According to the FCA, reports of cyber incidents at financial services firms increased 1000% in 2018. This figure is expected to rise with the growth in mobile payments.¹
¹Experian - New case of financial fraud reported every 15 seconds in 2018.
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