PSD2: A Strategic Perspective on Third-Party Payment Service Providers

Abstract

The purpose of this Thesis: “PSD2: A Strategic Perspective on Third-Party Payment Service Providers” is to explore how the new EU regulation “the revised Payment Service Directive” (PSD2) will change the European payments market through its provisions on access to account (XS2A) for Third-Party Payment Service Providers (TPPs), in particular for Payment Initiation Service Providers (PISP) and Account Information Service Providers (AISP). As the technological developments in general, and specifically in the area of financial technology have increased in recent years, so have the emergence of new payment services and payment service providers. By exploring how EU regulators are bringing these services and players into the scope of the PSD2, we have been able to illustrate changes in the payment chain which includes the major provisions related to the Regulatory Technical Standards (RTS) on Strong Customer Authentication (SCA) and Common and Secure Communication (CSC). Building on these findings, we have explored how existing market players (e.g. banks) have reacted to the provisions in PSD2 by going through previous research on the topic. As the PSD2 entered into force 13th of January 2018, and its supplementing RTS is scheduled to enter in September 2019, there are no general solution to incumbent’s approach beyond compliance with PSD2. Prior research has therefore focused on how incumbents should strategically position themselves in the market, based on the activities they perform. By using the provisions in PSD2 and prior research on incumbents’ strategic positioning, we have developed a model for how TPPs should strategically approach the (European) payment market.