The European Commission has today published the final “Regulatory Technical Standards” (RTS) for the EU Payment Services Directive 2 (PSD2). The EU Directive is a key payment services reform that will allow for third parties to provide payment services and aggregation services such as viewing balances across multiple bank accounts. Towards this end, the RTS specify the security measures to help keep customers safe when using these new services, including defining the requirements for strong customer authentication and the instances when payments services can be exempted from authentication.
Antti Lemberg, from Frontier’s Financial Services team, commented: “The publication of the RTS is a crucial milestone in the deployment of PSD2. The Directive has the potential to substantially disrupt existing payment services by allowing new entrants, including FinTechs, to compete and innovate. Perhaps more fundamentally, the new aggregation services may represent a major challenge to any banks’ business model that seeks to build and maintain relationships with their customers. The shadow over these possibilities has always been the potential for fraud and concerns around the security of customers’ information. The publication of the RTS should start to bring some clarity and reassurance, but the devil will be in the detail (and implementation)”.
Frontier has advised clients on these and other key regulatory developments in financial services.
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