We live in a dynamic, progressive world, where every day makes a confident step into the future. The financial sphere claims to be one of the most advanced spheres of this world, so the most important task it chose was the abandoning paper money and switching to cashless settlements. 2018 will be the key in the process of achieving this goal because at the very beginning of the year the famous PSD2 directive will come into effect.
Revised Payment Service Directive (PSD2) lays the foundation for payment services regulation, key consumer rights and the principles of interaction of market participants. In fact, it continues the course of the previous directive and adjusts the entire system to modern realities.
What CHANGES will it bring?
First of all, the directive introduces into the regulatory field new types of financial players — intermediaries. It will let the consumer authorize a third party to drive his finances. Banks, in turn, will have to grant the access to the customer account information to this third party. Any data will be provided without a special contract and without the bank consent. These third-party providers will gather all the financial information in one place as well as any transactions could be made from one place. Thus, all financial flows will pass above the banking system.
In simple words, the era of financial applications is coming. These applications will take on almost all the banking functions and the scales will swing towards the IT sphere.
What BENEFITS will it bring?
The biggest advantage is given to the consumer. Everything is collected in one place, you do not need to remember a huge number of passwords and carry a million cards. You can manage finances at any time and in any place with just one button. Also, the objectives of the new directive are to increase security and reduce the cost of any transactions. Isn’t that what every one of us would want? Definitely, this is a step into a new financial era.
What DIFFICULTIES can this directive bring?
The banks will suffer the most. In fact, the new directive left them only one function — the storage of cash. The vector of competition will change. If earlier they competed among themselves, now a new and far more terrible competitor — financial intermediary — has entered the arena. The story of the confrontation between mobile operators and messengers shows small chances of the banks to win.
Also, in connection with the new directive, it will be hard for governments. The changes not only need to be implemented at the local level but also they need to be controlled somehow. Each country has its own financial characteristics. The directive, however, compels to smooth out all irregularities in order to unify the world financial system. To achieve this, one country will only need to hold one voting, while the other — to redraw completely and radically the entire system.
PSD2 is a huge step towards a more prosperous future, a step into the world of safe, transparent and convenient payments. But this step will not be so simple. Somewhere we’ll need to sweat, something we’ll need to sacrifice, another to remake. But no goal can be achieved without serious effort. Could the directive become exactly what we are waiting for? Only time will answer this question.