Choosing a payment service provider shouldn’t just be about modernising your payment systems. It’s also a crucial way to keep up with international law, its changes and find out how new legislation could affect your brand as a business owner or senior manager in the business.
Choosing a payment service provider who cares as much about your business as you do for instance is a great way to better educate yourself about new directives such as the Payment Services Directive (PSD2). Created by the European Union, it’s entirely understandable if news of the directive has completely passed over your head.
It’s worth knowing about though, as PSD2 will help the payment services market become more open, allowing financial technology (fintech) providers to compete on a more even footing with banks, providing greater consumer choice overall.
Choosing a payment service provider that knows about PSD2
PSD2 is an EU directive set to come into action in January 2018 and will be implemented across all EU member states, including the UK. Though nothing is certain yet, it’s fair to assume that PSD2 will still apply to the UK post-Brexit too, as it’s suggested GDPR legislation will via a mirror bill set to be created by parliament.
PSD2 is being enforced with greater financial transparency in mind, and it’s something that’s got traditional big banking brands particularly worried. It’s a revision of the European Directive on Payment Services (DSP1) which was implemented in 2009, and is widely credited as being a key factor in the fast expansion of the fintech industry (think PayPal and mobile wallets).
PSD2 is set to go much further. With consumers’ consent, banks will have to open up to fintech companies and other third-party companies, passing on the data they have at their disposal.
Not only will fintech providers and other companies be privy to greater consumer information, they’ll also be able to access SME customer information and that of other business, allowing them to use that information to create brand new services and apps which traditional banks fear could leave them behind.
Get in on the ground floor by choosing a payment service provider
The fintech sector revolves squarely around innovation and disruption, and having access to what many in the industry are calling ‘open banking’ thanks to PSD2 is likely to spark a similar wave of technological creativity first seen from DSP1.
Banks would do well to partner with innovative fintech providers to stay relevant. What does it mean for your business, though?
Implementing PSD2 will see more financial services and products reach a tech-savvy market desperate for greater financial freedom from banks and other institutions. As a trader it’s up to you to keep an eye on what your market and wholesalers are using to stay relevant to them, too.
Choosing a payment service provider with experience of fintech and who is as passionate about seeing you succeed as you are will help keep you in line with what’s set to be a more tech-relevant financial marketplace before, during and after PSD2.
Fibonatix also offers payments charges as low as 1.5% when compared against the 3.5% offered by PayPal. Contact our team today to find out more.