Payment Services Directive II
Introduction
The Revised Payment Services Directive (PSD2) is a fundamental piece of payments-related legislation in Europe. In the UK, PSD2 is implemented through the Payment Service Regulations 2017 which comes into force from January 13, 2018. PSD2 is the product of a review of the original Payment Services Directive (PSD) and requires Payment Service Providers (PSPs) to make significant number of changes to existing operations.
The PSD was implemented in 2009 and aimed to create a single market for payments in the European Union, as well as provide a foundation for the Single Euro Payments Area (SEPA). Its main objective was to make cross-border payments as easy, inexpensive and secure as domestic payments.
However, as the digital economy developed, new services began to appear – services that lay outside of the scope of PSD. With the arrival of PSD2, these new services and their providers will be registered, licensed and regulated, increasing competition, providing more choices for customers, and encouraging lower prices for payments.
Introduction of Third Party Payment Providers (TPPs)
TPPs are PSPs who are authorised or registered with the FCA or another EEA regulator or otherwise permitted by law, who do not hold customer payment accounts. Under PSD2 there are two main types: Payment Initiation Service Providers (PISPs) and Account Information Service Providers (AISPs). PISPs will initiate a payment from a customer's bank account on their behalf, and AISPs will provide account aggregation services to customers. Under PSD2, banks are responsible for giving PISPs and AISPs access to a customer's account upon their consent.
Open Banking for Third Party Providers API Portal
Open Banking
Open Banking would enable personal and business customers to securely share their account and payment information with banks and third parties. This would enable customers to compare products, initiate payments and request account information. It is an initiative led by the UK’s Competition and Markets Authority (CMA) to provide the services through Application Programming Interfaces (APIs). Open Banking allows customer to share their account information with Third Party Providers (TPPs), without sharing their log on details. It enables those TPPs to access account information and provide the required services.
TPP On-boarding
We believe Open Banking can give our customers access to new products and services and increase innovation in financial services. We believe our customers access to some of these new services and will continue to increase the APIs and channels we support.
Before we can onboard you, you must be registered and authorised with the FCA or another European regulator and enrolled in the Open Banking Directory.
Third Party Provider Portal
If you are a FCA authorised Third Party Provider (TPP) then you can use the following links to access our dedicated Open Banking portals:
Find out more
For more information you may want to visit:
The Open Banking and the Financial Conduct Authority websites.
Frequently Asked Questions (FAQs)
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