The impact of the Revised Payment Services Directive on the market for payment initiation services

The Revised Payment Services Directive (PSD2) was adopted to stimulate the development of an integrated internal market for payment services. This paper describes the impact of PSD2 on online payments by documenting the impact of PSD2 on the market for payment initiation services, both now and into the future. PSD2 has formalised the relationship between banks and FinTechs by establishing open banking, thereby providing open access to customer account data and payments infrastructure. The general response of Europe’s bankers to PSD2 is one of uncertainty. While there is considerable uncertainty about both the gravity and timing of the threats to emerge under PSD2, the new regulation opens highly attractive opportunities for established payments organisations.