PSD2 in Europe – lessons for India’s payments initiative

the objectives of PSD2 are:

  1. Integrate payments across the European Union to build efficiency.
  2. Foster innovation by providing level playing field to non-banks with ‘access to bank account’ (XS2A). By extension, this brings all the non-bank players (Third Party Payment service providers, or TPP) under an updated and homogenous regulatory regime.
  3. Reduce the cost of transaction.
  4. Improve safety and security norms for transactions.

The directives segregate the payments market players in three broad categories:

  1. Account Servicing Payment Service Providers (ASPSP), or the banks where the customer account is maintained.
  2. Account Information Service Providers (AISPs) can be bank or non-bank players who can now access information from multiple accounts held with ASPSP.
  3. Payment Initiation Service Providers (PISPs) can link to the customer accounts held with ASPSPs and offer payment services.




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