The Netherlands’ implementation of the new Payment Services Directive, aka PSD2, and its development open banking, have been delayed by regulatory issues and a lack of consumer confidence, reports ComputerWeekly.
In its analysis, the magazine attributes the delay as due largely the difficulty for banks, the Dutch Data Protection Authority and other stakeholders to agree on important aspects of the roll-out. Concerns centre on data protection and the conflicting priorities of PSD2 and the European Union’s (EU) General Data Protection Regulation (GDPR) on the other.
As in other EU member states, open banking was introduced a year ago to enable third-party financial services suppliers access to customer data – if the customer agrees – via application programming interfaces (APIs). Jeroen van der Kroft, associate partner of EY Financial Services Advisory, told Computer Weekly: “Our survey, the Open Banking Index, shows that only 18% of Dutch people are willing to share their own transaction data with other parties.”
Van der Kroft compared the Netherlands’ position to that of the UK, where open banking is more advanced with legislation separate from PSD2, the Competition and Markets Authority’s (CMA) open banking rules.
He said that in the UK, the scope of open banking is wider than in both continental Europe and the Netherlands, where only payment data is involved. “In the UK, the scope of open banking includes the total financial picture of the consumer, including, for example, savings accounts and credit cards,” he added.
Gijs Boudewijn, deputy general manager of the Dutch Payments Association, said that in countries where the payment system is less innovative and well-organised than the Netherlands, much greater benefits from PSD2 are possible. “We have iDeal, an online payment service that other countries are not familiar with,” he said.
Launched in 2005, iDeal is an e-commerce payment system based on online banking. It allows customers to buy over the internet using direct online transfers from their own bank account and has become by far the most popular method for online payments in the Netherlands.
“Making innovations in a country where millions of people have become accustomed to iDeal and Tikkie is not as easy as in countries where payment systems are not as modern,” said Boudewijn. Tikkie, an app that allows friends to quickly repay small advances to each other, has added more than three million users – one in five of the Dutch population – in just two years.
To date, there are few providers of new services that make use of Dutch citizens’ transaction data. Tobias Oudejans, spokesman for central bank De Nederlandsche Bank (DNB), told ComputerWeekly: “We have already granted one licence, to investment company Peaks, and more applications for licences are being processed.”
EY’s Van der Kroft said the expectation is that by mid-2020 there will be about 350 fintechs with a European passport that can offer services in the Dutch market with an EU licence. Dutch banks are now testing and making the required application programming interfaces (APIs) available to third parties, and these user interfaces should go live by mid-September. Several new service providers are then expected to bring their services to the market.
Boudewijn believes many Dutch consumers do not yet fully understand the scope and possibilities of PSD2. “We shouldn’t think that everyone can just plug into your payment environment at a bank,” he said. “There are quite heavy demands on the licensing process. And, as of September this year, there will be additional requirements for strong client authentication and secure communication to the consumer.”
Oudejans agrees, adding: “The government has decided that the Data Protection Authority will supervise the privacy part of the PSD2, because that is its expertise. We at the DNB grant licences to organisations that wish to make use of the PSD2 and use the requirements that we also apply to regular payment institutions.”
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