To some, 13 January and the implementation of the second Payment Services Directive (PSD2) will be a significant milestone in their business’s path. They will be joining the community of the regulated financial services sector, which means that their owners and managers take on significant additional liability and are subject to a new level of scrutiny. They will have to meet certain standards and requirements ranging from the information they must give their customers to the type of insurance they must hold (in the case of the payment initiation and account information service providers) to how they treat client money (for authorised payment and e-money institutions and small e-money institutions).
When does a great deal turn out to be not such a great deal? When a credit card surcharge is added right at the end. Such hidden surcharges will be a thing of the past, mostly, come mid-January when the second Payment Services Directive (PSD2) is implemented.
The gateway for PSD2 applications opens today. About 500 authorised payment institutions and e-money institutions and 150 payment initiation and account information service providers are expected to submit applications to the FCA over the next few months in order to be authorised by 13 January (in the case of payment initiation and account information service providers) or re-authorised by 12 July in the case of those firms already authorised.
In six months’ time, the second Payment Services Directive (PSD2) will be implemented in the UK. And while we don’t yet have finalised implementing documents, progress is being made on what the realised directive will look like.
The technical glitch that left thousands of customers of high profile fintech start-ups without access to their money last month should act as a major wake up call to payment services providers across the UK.