Payment Service Directive II (PSD II)
Affected banks: all banks in the EEA
Mandatory effective date: expected Q3 2019
Solution status: considered
Solution implementation date: N/A
January 2018 was particularly busy for the financial sector, at least from a regulatory perspective. Among other things, the new Payment Service Directive (PSD II) came into effect after the EU member states enacted it in national law. In its aim to create a single European payment market, the directive presents many risks, but also lots of opportunities.
Generally speaking, the directive comes in two phases: the first has already been implemented and includes rules on transparency (information to be provided to the client), dates to be complied with in payment transactions (with particular emphasis on value dates), unconditional rights to refund in direct debit schemes, and some rules on cost and fees (such as no charge for the beneficiary), just to mention a few.
But the real innovation is yet to come: account information services (AIS) and payment initiation services (PIS). Considering that the total number of non-cash payments in the EU in 2016 amounted to 122 billion (49% of all transactions), with the importance of paper-based transactions continuously decreasing (the ratio of paper-based transactions to transactions initiated electronically stands at around one in nine)3, it is easy to see why so much attention has been given to this directive.
According to Deloitte, retail payments generated EUR 128 billion in revenue for banks back in 2015, coming from interest, spreads, fees and annual maintenance costs.4
Account information service providers (AISPs) will be able to collect data about payment accounts, aggregate it, perform analysis and offer services based on this data. Payment initiation service providers (PISPs) will have the right to initiate a payment on behalf of the client. Both services will be offered through the development of open APIs (application programming interfaces) based on country-specific standards, such as ‘Open Banking’ in the UK.
The solution for the first phase of PSD II has been developed by ASSL in order to meet the legal deadline.
The 13th of March 2018 the RTS about strong customer authentication and common secure communication have been published in the Official Journal of the European Union, which set the deadline for the implementation of the second phase: 14th of September 2019.
The solution for the second, more sensitive phase has yet to be developed, even if Avaloq Evolution is already at an advanced stage in its development of the public APIs based on the Open Banking standard.
|Q2 2018 ||Webinar about second phase of PSD II |
|Q2 2019 ||Planned going live of solution |
 European Central Bank (ECB), “Payment statistics for 2016”,
 Deloitte, “Payments disrupted”,