Technological innovation breaks into the payment services market.
The new European payment services directive, also known in the financial world as PSD2, responds to the substantial technological innovations our personal finances are experimenting.
What do these changes represent and how can they affect me as a user when depositing, transferring or withdrawing funds from my account?
- First of all, financial innovation in our day-to-day life produces a constant increase of electronic payment transactions: using mobile devices and internet has become very common.
- Secondly, while electronic payment transactions have increased, also have the risks they entail, such as credit risks, cyber-security, and protection of our privacy. We have to be extremely careful with the apps we download onto our electronic devices and with the consents we give with just one click!
- And finally, technological innovation in the retail payments market is producing the emergence of:
- New services, especially within internet payments. In particular, “payment initiation services in e-commerce” act as a link between the trader’s website and the payment services supplier’s online banking platform that manages our account to allow online purchases via bank transfer.
- New additional services, such as account information services. These services provide online aggregate information about our payment accounts which we may access through our bank’s online interface, allowing us to have an immediate overview of our global financial situation.
- New actors in the market, who are precisely the suppliers of these new “payment initiation” and “account information” services.
The new regulations intend to guarantee equal operational conditions both for the existing traditional suppliers, such as credit institutions (mainly banks), payment institutions and electronic money institutions, and for the new ones, giving access to modern payment means to a wider number of consumers in the European Union, while also ensuring our protection when using these services.