Strong Customer Authentication (SCA)

 Security is paramount and the PSD2 framework calls for strong customer authentication. Maintaining an API is a challenge for financial institutions with minimal technical expertise. From a banker’s perspective, PSD2 results in additional costs, exposure to the competition and security risks.

Collecting Financial Data

The directive places an obligation on banks to provide their customers’ financial data to authorised TPPs (Third Party Providers) when a customer wishes to pay from their bank account via a payment initiation service provider (PISP) or simply grant permission to access that data through an account information service provider (AISP).The directive places an obligation on banks to provide their customers’ financial data to authorised TPPs (Third Party Providers) when a customer wishes to pay from their bank account via a payment initiation service provider (PISP) or simply grant permission to access that data through an account information service provider (AISP).PSD2 places an obligation on banks to provide their customers’ financial data to authorised TPPs (Third Party Providers) when a customer wishes to pay from their bank account via a payment initiation service provider (PISP) or simply grant permission to access that data through an account information service provider (AISP).

Third-Party Providers

There is very little preventing a bank from becoming a TPP. Issuing a TPP licence to a bank is almost a formality, since banking activities cover the vast majority of TPP functions in the field of banking and finance. Operating as a TPP, banks can connect to their competitors and gather transactional information from their customer base.There is very little preventing a bank from becoming a TPP. Issuing a TPP licence to a bank is almost a formality, since banking activities cover the vast majority of TPP functions in the field of banking and finance. Operating as a TPP, banks can connect to their competitors and gather transactional information from their customer base.