In January 2018, Europe will be hit by the next wave of payment regulations – Payment Services Directive 2 (PSD2) – which has broad implications and could lead to bank-to-bank payments becoming an everyday reality for consumers.
It could potentially capture 20% of customer spend away from existing card schemes and unlock over €3 billion from reduced transaction fees. In addition, it will allow consumer businesses to access information and initiate transactions from consumer bank accounts with the ease of a credit or debit card, but without going through the traditional card schemes.
In light of the potential financial and strategic impact and the timing of the regulation, we think major players in the payment ecosystem need to define their strategies now. For banks, card networks, acquirers, and merchants, there are some hard questions to answer, including:
- How will PSD2 affect the payments landscape two years and five years from now?
- What happens if my major competitors build capabilities to initiate bank-to-bank payments and I do not?
- What additional business opportunities could arise if new payment methods become popular with consumers? And how can I capitalise on them?
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