How Payment Services Directive 2 will disrupt financial services

The EU’s second payment services directive (PSD2) will have a dramatic impact on Europe’s banks and the fintech industry. The disruption to established markets will be significant, but opportunities abound for financial services providers who prepare themselves.

At a glance

• PSD2 refines regulations concerning passporting, authorization, rules, consumer protection, and the supervision of payment institutions.
• Three of its most significant impacts will be simplifying payment-making, disintermediating banks and their clients, and increasing transparency—which may yield more innovation.
• Application Programming Interfaces (APIs) can help banks enhance credit risk scoring and organize themselves in a more modular way than ever before.