Revised Directive requirements finalised by FCA
The Financial Conduct Authority’s approach to implementing the revised Payment Services Directive (PSD2) has been published today. (19/09/17)
Setting out the requirements for firms that deliver payment services, the PSD2 is an EU Directive which will impact banks, building societies, payment institutions, e-money institutions as well as their customers.
In addition to pushing down the costs of payment services, the aim of the Directive is to improve security of payments, consumer protection and innovation promotion. It’s set to come into effect from 13 January next year.
The introduction of the PSD2 will also mean more services will be brought under the scope of the FCA. Aiming to streamline the system, this includes account aggregation services, bringing all bank account together in one location.
Commenting on the importance of the PSD2 was Christopher Woolard. The Executive Director of Strategy and Competition at the FCA stated:
“Competition in retail banking and payments is vital to UK consumers and the wider economy. PSD2 builds on this by giving consumers more choice around how they manage their payments and bank accounts. It also brings in some important protections for consumers and seeks to increase the security of payments.
“Firms should make sure they know what’s required of them to be ready for the new regime. We will continue to monitor closely whether competition in the market improves in the interests of consumers.”
In addition to the new services brought under the scope of the FCA, the PSD2 also introduces several new requirements for firms regarding treatment of customers, complaint handling and the data which must be reported to the Authority.
It also requires existing payment institutions and e-money institutions to be re-authorised or re-registered. Firms should consider whether they now need to seek authorisation or registration because of changes to the scope of regulation made by PSD2. This includes businesses providing account aggregation or online payment initiation services.
Applications for this will open on 13th October.