The European Union is planning to have one payment area that would process all cross border payments for both businesses and individuals. This will make cross border payments easier across European territories.
The European Banking Authority (EBA) is working on the new payment services directive. With this directive, internet payment services would be much easier and safer. Consumer rights are also protected in the process.
“There are a couple of other objectives that the PSD2…(has) like increasing security for payments, making payments convenient for consumers,” Dirk Haubrich, Head of Consumer Protection, Financial Innovation and Payments at the EBA
More choices for financial services?
With this directive, transactions would be made safer, faster and more convenient. This has been the observation of Harsh Sinha, vice-president of engineering at Transferwise. Josh Bottomley, global head of digital for retail banking and wealth management for HSBC, has said that the PSD2 would mean that sharing of data would be much easier.
Financial stability is the aim of the new directive, which would be applicable by 2018. With the onset of eCommerce, this directive would make eCommerce transactions within the European Union safer and faster.
PSD2 would enable businesses and individuals to use third party providers to manage finances. That could mean using Google or Facebook in such cases.
Banks would have to provide third party systems access to customers’ accounts. It would no longer be just banks then that could provide such services, but it would be open for more businesses to choose where to get finances.
PSD2 also aims to unify the European market for financial services. This can be competition for banks, though with a changing market it might be necessary. eCommerce has opened the way for this, and has made it necessary for such directives if it would continue as such.
Do you think would the PSD2 help eCommerce? Do you think there was any existing issue with transacting across Europe? We are not so sure here at eSellerCafe but as always would love to hear your thoughts down below.
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