It is in this year, 2018, that the PSD2 (Revised Payment Service Directive) will be implemented. Instructions from the European Union (EU), banks’ monopolies on their customers’ account information and payment services will no longer be permitted.
PSD2 will enable bank clients to use third-party vendors to provide financial services on their behalf. In the near future, clients will have the option of using any provider to pay their bills via person-to-person (P2P) transfers, while still having their money assets secured in their current bank account. Banks will be obliged to ensure that these third-party providers are given access to “their” customers’ accounts through open Application Programming Interfaces (APIs). This will enable third-parties to build financial services on top of banks’ data and infrastructure.
All of this will significantly change a bank’s competition model. It will not be about changing account location; rather, it will be about the services that customers use. No longer will banks be competing against their peers. Instead, they will be competing against one another. PSD2 will change customer expectations; payments’ value chains; and determine what business models are profitable.
The Payment Initiation Service Provider (PISP) and the Account Information Service Provider (AISP), are two entries into the EU’s changing financial system. Because of PSD2, they are service providers which will have access to the account information of bank customers. The fact is that such services could look at a user’s spending behavior and provide analysis, or even aggregate a user’s account information from several banks, looking at that as well. A PISP provider initiates a payment on behalf of the user, with P2P transfer and bill payment as component parts sure to be seen when PSD2 is enacted.
A More International Perspective
It is well understood that the EU evidences great ambition and in so doing it issues laws or directives to realize its goals. The EU ‘s involvement in the deregulation of telcos has produced spectacular outcomes. Huge operators have transformed old national monopolies in national amphi-polies, tri-polies or tetra-polies. In the meantime, the telco industry itself has been badly damaged and is now dying. Today, Europeans buy phones via the United States (US) or Korea and network switches in China or the US.
As to bank services, and with no directives, it is very possible that Citibank, Bank of America Corporation (BAC), and Chase Bank will do better more quickly if they may take advantage of the frantic activity Europeans are going to create in their homelands.
No matter what, it is clear that the mandate is for creation of a more competitive bank environment, thereby creating a global marketplace for European bank services.
Lusis payment hub SOA architecture provides agility and scalability for an evolving marketplace
SAN FRANCISCO & PARIS--(BUSINESS WIRE)--Lusis Payments, a global innovator of mission-critical payments software, announced today that CIBC, a leading Canadian-based global financial institution, has migrated its POS, ATM, and Payments Hub to the Lusis TANGO platform. CIBC has been modernizing its payments infrastructure to improve their ability to meet the demands of today’s evolving payments ecosystem.
TANGO is an online transaction processing engine for mission-critical 24x7 solutions including payments, retail, loyalty, finance, utilities, and transport. TANGO delivers performance, availability, and scalability, with a rich set of functionalities, all from a single application, a single code set and a single architecture. This flexibility makes TANGO ideal for the next generation of payment systems.
CIBC selected Lusis Payments’ TANGO product for use across a range of banking channels. TANGO allowed the bank to move to an open platform built on a high-performing micro-service architecture providing agile banking needs. CIBC has also implemented a number of new functionalities and capabilities to its payments systems as a result of the migration.
“TANGO is the payments HUB facing todays challenge,” said Philippe Preval, President and CEO of Lusis Payments. “TANGO is addressing business needs both now and in the foreseeable future. Our team worked closely with CIBC to provide the flexibility it needs in today’s evolving payments landscape.”
About Lusis Payments
Lusis Payments is an innovative global software and services provider to the payments industry. The company’s proven, cutting edge technology operates in numerous hardware and operating environments. The TANGO platform, combined with the know-how to mitigate risk and deliver high levels of assured customer service, constitutes a unique proposition for organizations faced with the challenge of adapting to traditional and future needs in the payments ecosystem.
Brian D. Miller, 415-829-4577
A host of FS firms, including three of Canada's big five - BMO, CIBC and Scotiabank - will begin rolling out support for Visa and Mastercard cards in the next few days. TD Bank and RBC are not on the list. Support for Interac debit cards will arrive next week, with American Express and Tangerine following in the summer.
All of the big banks have already signed up to Apple Pay, although CIBC is the only one to have so far also added support for Samsung Pay.
The move means that customer will be able to link multiple cards to the Android Pay app and use their NFC-enabled devices to make contactless payments instore at hundreds of thousands of shops. It can also be used for in-app purchases.
Mark O'Connell, CEO, Interac, says: "As the payment landscape evolves, we strive to offer Canadians innovative and seamless payment experiences that are fast, secure and increasingly more digital. The launch of Android Pay in Canada will give Interac debit cardholders yet another way to pay using their own money."
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