Open banking: the quick guide for merchants

Paysafe
Data protection, binary code with European Union flag.

The Second Payment Services Directive (PSD2) encompasses the full payments cycle, and with cross-border payments and an ever-increasing use of digital payments on the rise, getting to grips with the new directive and how it applies to merchants is critical. 

In theory, PSD2 will open up new opportunities for non-traditional financial services by widening choice for consumers when it comes to products and services. These updated regulations are now commonly referred to as “open banking”, and the industry could experience a sea change with the proliferation of new players and products harnessing and using data that only the banks held. That is, until now. Some are suggesting the end of banking as we know it, others envisage closer collaboration between banks and fintechs.

While the potential for sector disruption may have industry observers on the edge of their seats, what does this mean for merchants on a practical level? Some key implications  of the new directive include the consumer uptake of PISPs (Payment Initiation Service Providers) and AISPs (Account Information Service Providers), and when it comes to authentication and customer data security, 3-D Secure will be a central tenet to European ecommerce. Ultimately, authentication is the key to accessing new products and Paysafe participated in the consultation on Strong Customer Authentication (SCA) rules. 

This quick guide to PSD2 highlights the most salient points about surcharges and SCA. Hopefully, the guide provides some good thought starters for a business approach to the new directive. 

Download the quick guide to the forthcoming changes here.






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