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2017 Feb 3rd Malta - NPF2017 - APIs in context of PSD2

What is the potential role and implications of open banking APIs in the context of PSD2 ?
Why is it relevant for merchants ?

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2017 Feb 3rd Malta - NPF2017 - APIs in context of PSD2

  1. 1. Role & implications of APIs in context of PSD2 NPF 2017
  2. 2. ©Ecommerce Europe www.ecommerce-europe.eu Single European Payments Area • Important initiative to harmonise European Payment Landscape is PSD2 • Especially interesting, XS2A
  3. 3. ©Ecommerce Europe www.ecommerce-europe.eu Benefitting merchants • Example – SMEs could save time on their online accounting Many SMEs use cloud-based platforms for bookkeeping but have to input their transaction data manually. APIs from their current account providers would make it easier to reconcile payments • Again, interoperability issue: how to unlock data from >4000 banks, with own legacy, within EU?
  4. 4. ©Ecommerce Europe www.ecommerce-europe.eu PSD2 fragmentation risk Numerous examples of “standardization” emerging  W3C Web Payments  Convenient Access to PSD2 Services (CAPS)  Berlin Group  Open Transaction Alliance (Innopay)  DE: OBP (Open Bank Project): developed own open API standard  PRETA (supplier MyBank)  Euro Banking Association (DCSI, Open Banking Forum)
  5. 5. ©Ecommerce Europe www.ecommerce-europe.eu Differing on 3 dimensions • Scope of ‘openness’ From PSD2 compliance only to enabling banks to reap the business opportunities of open business models; • Scope of standardization From pure technical & functional requirements to full set of operational and governance rules; • Scope of collaboration (‘reach’) From individual bank driven efforts to combined bank & non-bank collaborations on national or regional level Source: Innopay
  6. 6. ©Ecommerce Europe www.ecommerce-europe.eu EBA RTS confirms risk “All banks have to develop own communication interface” The problem with the RTS is that they are not really Technical and they don’t really provide Standards
  7. 7. ©Ecommerce Europe www.ecommerce-europe.eu Merchant concerns • Lack of interoperability, not only in terms of payments systems & legal (eg VAT) • Roadmap pressure ! • Up to merchants to decide how much risk we accept !
  8. 8. ©Ecommerce Europe www.ecommerce-europe.eu UK – EU : 1 - 0 • Open Banking Standard (OBS) Working Group to address technical design and infrastructure issues – driven by Treasury and CMA • Formalizing an approach to accreditation and governance Big Q: Possible within European Patchwork?
  9. 9. ©Ecommerce Europe www.ecommerce-europe.eu EBA RTS, the day after • Ideal: single message, interface standard & infrastructure with full pan- European reach for XS2A transaction services. Would maximise benefit for end-users (payees and payers) and ultimately provide for a positive ‘market ROI’ on PSD2 compliance investments. > Implicit PSD2 promise • However, with current RTS draft, we are nowhere near such single standards. EBA encourages ‘the industry’ to develop compliant standards and/or technological solutions to complement the ‘principle-based’ RTS requirements. But what exactly is ‘the industry’? Who should take the lead in this? And when should such collaborative effort start, considering the foreseen enforcement date of the RTS (Oct. 2018 earliest)? Source: Innopay
  10. 10. ©Ecommerce Europe www.ecommerce-europe.eu ERPB role
  11. 11. ©Ecommerce Europe www.ecommerce-europe.eu Ambitious goal • Interface standardization  Data elements definition  Message definitions & formats  Choice communication layer  …. • Operational aspects  Operational directory  Message processing • Business practices  Dispute handling  … 3-layered API solution ?
  12. 12. Thank you

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