This document discusses expectations versus reality for PSD2 implementation from the perspective of NEO Finance. It begins by explaining how NEO Finance entered the PSD2 business and then discusses the current state of PSD2 and APIs. It notes that expectations for PSD2 did not match reality because it was intended for long-term relationships but is used for short-term, and banks were not fully prepared. The document then outlines some existing business cases for PSD2 including payments, basket payments, and personal code verification. It concludes by discussing potential future uses such as specialization by product/country and niche products with added value.

1. Life under PSD2:
expectations vs reality
Aleksejus Loskutovas
Head of Open Banking department
NEO Finance, AB
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2. 1. How did NEO Finance find itself in this business?
2. Where are we now with PSD2 and API?
3. Why don’t PSD2 implementation expectations match the reality?
4. What business cases on PSD2 we already have?
5. What future usage of PSD2 we see?
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3. How did NEO Finance find itself in this business?
o The Bank Link was too expensive for our business
o That time there was a lot of talk about PSD2
o We already had a qualified IT team
o We started developing PIS for ourselves only
o But our created PIS was suitable for others too
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4. Where are we now with PSD2 and API?
o Our USP – to provide high quality PIS at the lowest
price in EU
o We are connected to more than 20 banks API
o We are ready to provide PIS in 4 EU countries
o We have more than 60 clients in Lithuania alone
o We are doing more than 0.5 mil transactions per
month (in December 2019 it was about 80% of all
transactions under PSD2 in the Baltics)
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5. Why don’t PSD2 implementation expectations
match the reality?
o PSD2 was created for long term relationships,
but it is used for short term only
o Not all banks had allocated enough resources
to prepare for PSD2
o There are different interpretations of the law
and different UX in different countries
o There was no transition period for testing the
bank API integrations
o To have an API documentation does not mean
to have working API
o The testing of different authorization methods
in other countries is a big challenge
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6. What business cases on PSD2 we already have ?
o Classic PIS – 50 %
o Resale of our PIS – 12 %
o Basket payments – 25 %
o Payments distribution – 10 %
o Personal (tax) code verification – 8 %
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• Merchant
• Financial institution
• Utility service provider
• Reseller (other EMI or PI)

7. What business cases on PSD2 we already have ?
Basket payments:
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Client group Use case Additional value
Aggregators Utility bill aggregator One payment to aggregator’s
account to pay several bills
Telco bill – 15 EUR
Utility bill – 50 EUR
Electricity bill – 25 EUR
Aggregator service
Total amount of bills:
90 EUR
Aggregator service
Bank account – 90 EUR

8. What business cases on PSD2 we already have ?
Payments distribution:
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Ticket – 50 EUR
Ticket seller’s
transition account:
50 EUR
Ticket seller’s
Bank account – 5 EUR
Event organizer’s
Bank account – 45 EUR
Client group Use case Additional value
Ticket sellers Ticket price distribution between
seller and event organizer
Real time payment distribution

9. What business cases on PSD2 we already have ?
Personal (tax) code verification:
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Client group Use case Additional value
Financial institutions Customer personal (tax) code and /
or bank account No verification
KYC / AML requirements
Payment – 0.01 EUR
(with additional
personal or TAX code
information)
Payment could be
done only if person’s
personal or TAX code
for verification in the
bank is the same as
provided to us

10. What future usage of PSD2 we see?
o Specialization by product and by country
or region
o Niche products with added value
o Competition on price because every basic
TPP product will look alike
o Premium API from banks for money
o Other “open” opportunities in retail, health,
telco, utilities etc.
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11. Thank You!
aleksejus@neofinance.com
www.linkedin.com/in/loskutovas/
www.neopay.lv