Despite the introduction almost two years ago of the European directive PSD2, very little has changed in the Dutch payments landscape, believes Maurice Jongmans, CEO of Online Payment Platform and chairman of the VBIN (United Payment Institutions Netherlands).
It has been almost two years since PSD2, the new European Payment Services Directive, came into force in the Netherlands. Among other things, these regulations were intended to increase competition and innovation and remove barriers for new entrants to the payments market.
Jongmans: "Yet relatively little has changed in the payments landscape. How is it possible that major innovations from new entrants are as yet lacking and the great promise of PSD2 is still not being fulfilled?"
"In particular, expectations were high for new account information service providers, the Account Information Service Providers (AISP) and payment initiation service providers, or Payment Initiation Service Providers (PISP). There are many interesting initiatives that one could come up with. However, to be allowed to operate as an AISP or PISP and make payments and view transaction data on behalf of the account holder, a license is required from the Dutch Central Bank."
"That is also directly where the first problem lies. The fact is that this licensing process is agonizingly slow. In fact, the Netherlands was behind from the start. When the legislation entered into force in February 2018, it then had to be transposed into national legislation in the Netherlands. This took no less than a year. Furthermore, the licensing processes that market startups have to go through are very long. You can have very good ideas, but if there is still no permit after six months, there is little you can do. You then end up in a kind of vacuum."
"It is significant that this process is much easier in other European countries. It's good that in the Netherlands a lot of attention is paid to issuing a license, but you don't always have to go for the toughest process. You see the same thing happening in the world of crypto service providers."
"Once organizations do have a license, you see that these new services do not take off well. This is partly because the services of a PISP are very similar to payments via iDEAL. In the Netherlands, iDEAL is so well developed that there is only a limited advantage to organizing a similar payment in a different way. One PISP use case that can be successful in practice, however, is being able to schedule an iDEAL payment. For this, we at Online Payment Platform, for example, have already conducted a pilot with the CJIB. You can also set up a recurring iDEAL payment or prepare a 'basket' of payments. Think for example of paying for a vacation in several instalments. For this, the payments can be put as a single link in the customer's payment environment, which can approve and schedule them all at once. The added convenience for the user is the big advantage here."
"To access transaction data and make payments as an AISP or PISP, it is necessary to link to an API of the bank. The way banks have set up that API is a third barrier to the promise of PSD2. First of all, the APIs vary a lot from bank to bank, despite sometimes claiming to use the same standard. That already makes it complicated. Furthermore, they often do not appear to work well. This creates an additional barrier for banks to get started quickly and without problems. For example, you often do not get the correct status feedback with scheduled PISP payments. This comes at the expense of user confidence. The ease of use with which a payment can be approved by the user also needs to be greatly improved at many banks."
"The barriers faced by AISPs and PISPs fortunately do not mean that PSD2 is not yet being reaped at all in the Netherlands. However, many initiatives are not very surprising and focus mainly on household books and subscription management services. One solution that is innovative and does serve a social interest is Buddy Payment. This uses data to help people better manage their budgets and reduce debt. This app is currently being tested by 10 municipalities."
Jongmans concludes, "The picture I had in 2018 of the possibilities of PSD2 has not changed. The extent to which new payment market initiatives have been developed in the meantime is disappointing, though. The promise that glimmered for PSD2 has not disappeared. Meanwhile, I did adjust my expectation and my hopes are set on 2022. But then I really expect that we will see interesting and innovative applications."
Source: Banks.com
