PSD2: banks and regulators are struggling in a complicated landscape

Perfect Storm

At the time of writing this article, the 21stof August, we have barely one month to go before PSD2 is a full reality in Europe. PSD2 is also known as “the directive that will change banking as we know it”, “the single biggest change in the banking industry ever” and “the payment directive that threatens the bank's business model”. The introduction of PSD2 will clearly be an industry shaking event.

With just so little time left, one would expect that every party is battle tested and ready to go. That API’s are implemented, developer portals launched, licenses and certifications obtained and teams lined up.

Therefore, it comes as a surprise that a leading regulator is launching a public consultation on a Q&A regarding potential obstacles in the customer journey when using the PSD2 mandated Payment Initiation and Account Information services.

Furthermore, Bank of England extended the deadline of the implementation of Strong Customer Authentication (a vital part of PSD2). This was quickly taken over by the Central Bank of Ireland. Last week, DNB also announced an extension of the deadline for the implementation of SCA requirements for payment service providers. Without providing a specific timeframe….

On the implementation side, the situation is similar. Some Account Servicing Payment Service Providers (ASPSP’s) have launched developer portals and published their API’s, a large majority of them, is still far away from go-live.

Moreover, some of the ASPSP’s have already published their fallback solutions in case their API’s do not meet the legally required levels of availability and performance, as outlined in article 32 of the Regulatory Technical Standards (RTS).

ASPSP's keep testing and developing their API’s, leading to a constant stream of minor and not-so-minor updates in their API-stores. These updates range from changes to message formats and API scope growth (both minor) to the ability to initiate recurring payments in addition to regular SEPA Credit Transfers (not-so-minor).

Complicated landscape

With over 6000 traditional banks in Europe alone, the ASPSP landscape is very complicated. And it is on the brink of total disruption. Neobanks like Monzo, N26, Revolut and Starling are merely a wake-up call for an industry that sooner or later will face the frightful five while Chinese superpowers like Ant Financial and WeChat Pay are also seeking their place under the sun.

The banking landscape is not only very crowded and -mostly in case of the traditional banks- technologically lagging behind, it is also suffering from constantly changing rules and regulations. In this situation it is hardly surprising that ASPSP’s are struggling with their PSD2 readiness. Again they have to oblige to, and invest in, new rules, regulations and the accompanying technology while they are still swallowing the melon of past regulatory and compliance changes.


In this environment, Third Party Providers (TPP) must assess for themselves whether it’s wise to invest substantially in non-differentiating capabilities like PSD2 connectivity. ASPSP’s are constantly changing, updating and modifying their API’s while at the same time they are not really willing or able to cooperate.

Partnering with a Technical Service Provider that absorbs this complexity, now and in the future, and offers a pay-as-you-go pricing model, alleviates the TPP’s from the burden of big upfront investments in technology and allows them to be more flexible, always compliant and most importantly focus on customer experience and innovations.

Need help connecting to the banks and getting ahead of the competition?

Visma Connect helps companies reap the benefits of PSD2 XS2A services. We are a Technical Service Provider (TSP) and offer a unified and standard API for Payment Initiation and Account Information services. We deliver these services on our payments SaaS platform.

Our team has vast experience and knowledge of business critical transaction processing and secure data integrations between different organizations. Visma Connect is the only NL SWIFT Service Bureau and successfully operates the Dutch Customs Single Window, processing over 300 million business-critical messages annually.

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