Within the EU, the Netherlands has the good reputation of doing everything as it should be done, and certainly on time. That is why it is quite a surprise that the Netherlands is the last EU member to introduce the PSD2 payment directive, over a year after the deadline. So what happened?
The new directive that should have been in place by 13th January 2018 is to increase pan-European competition and participation in the payments industry by including non-banks and fintech companies, and to protect consumers’ rights and obligations concerning the amount of their personal data that may be shared.
PSD2 is the successor of Payment Services Directive 1 and the route to its implementation has been quite a journey for the Dutch, who have had to go back to Brussels time after time to request an extension. When it became clear that the implementation date of 13th January 2018 could not be achieved, it was assumed that a Spring 2018 implementation would be achievable. Continual discussions about how this directive could be monitored, delayed the process even further. It was June before the first proposal was presented to the House of Representatives.
The final proposal was presented last December but did not receive the green light that was hoped for. Finally, on Monday it was announced in the official Dutch Government Gazette that from now on there is nothing to stop tech companies from applying for a permit from the Dutch Central Bank. Some companies had already started this process, anticipating this announcement. Last year some twenty different parties registered with the regulator and six of them applied for a permit in the lead-up to this announcement. According to the Dutch Central Bank, the others were waiting until PSD2 is in place.
We aren’t alone
The Netherlands wasn’t the only country to miss the deadline: some fifteen countries were also not ready on time. A so-called ‘infringement procedure’ was started in order to put extra pressure on these countries. That started with a series of letters and ended with the case being brought before the European Court of Justice. It is not yet known if the Netherlands will have to pay a penalty. The court has asked for a further explanation for the delay.
There are still discussions going on about the directive. Last week it became clear that Europe is not exactly aligned about the way that tech companies can have access to account information. There is now a special project group working on how these rules can be applied to suit everyone.
Over the last few weeks there have been many rumours about the introduction of PSD2. Last week fintech companies received a letter from the Dutch Central Bank announcing that the Digital Supervision Portal was almost ready to be opened up to payment and electronic money companies that were wanting to make use of this new directive.
PSD2 was introduced by the European Commission that saw European banks as no longer being innovative. The hope is that by allowing non-bank companies to have access to payment data, this will introduce competition and innovation and will lessen the power currently enjoyed by the main banks. It has become clear that the big technology companies will be able to profit from this directive. The first one to seize this opportunity seems to be Google: they have been granted a full PSD2 permit in Lithuania. But other tech giants are now showing their faces in Europe; these include the Chinese company, Alipay, Facebook and Amazon.
European regulators are becoming increasingly worried about how the directive is opening the door open wide for the big data players in the market, when it should be providing support to the smaller, more innovative companies. And consumers are also not yet convinced. In a recent survey conducted by EY about sharing bank data, only one fifth of the Dutch population are willing to do this if it will lead to improved services.
As an innovative fintech company in the Business to Business market, we see the introduction of this directive as a chance to finally bring some innovation to this market and to be able to improve payment services for our customers and future clients.