PSD2

A European standard for payments

The European Union places great emphasis on the harmonization of member states’ payment standards. Having a single digital market ought to create a digital level playing field for payment, combat fraud and cybercrime, and, not to mention, boost consumer willingness to do business internationally.
The so-called “PSD2” has been a first step towards making payment accessible to both current and new information and to transaction service providers. This will bring a whole range of opportunities for new fintech business and big (non-European) tech companies to remain in or enter the market of (online) payments.

As of 2018, the Access-to-Account (“XS2A”) is in place, giving businesses access to consumer accounts – after receiving permission, of course. This means banks are obligated to share payment dates and account information with third parties at the explicit request of consumers. Amazon and Facebook can be such third parties, or, in fact, any other player interested in the financial sector. Paying online in a web store is possible without any obvious interference of banks. In the process, Europe has been flinging open the door for new fintech market entrants and retail titans of China and the United States.