Delays to PSD2 were inevitable as the payment service providers and the banks are not ready for such a huge change to how their payment systems operate.
Lobbying has begun
The European trade association EPSM which represents the interests of 67 members in the payment service providers for merchants, like acquirers and internet PSPs for payments acceptance in Europe yesterday issued a Press Release which began very deferentially:
- EPSM appreciates the acknowledgement by the European Banking Authority (EBA) that the payments trade needs a flexible approach with the introduction of Regulatory Technical Requirements (RTS) for Strong Customer Authentication (SCA). These will become applicable from 14th September 2019.
- EPSM is aware that migration plans are currently being negotiated by payment industry participants, together with their respective national authorities, such as the Financial Conduct Authority (FCA). The aim is to find appropriate solutions for solving technical and operational challenges posed by remote card payments – for merchants, cardholders, issuers, and acquirers.
To solve the problems needs 18-36 months delay
However, EPSM believe that rolling out SCA-compliant solutions to merchants poses major challenges. To avoid significant acceptance disruptions, EPSM recommends that all regions should agree an additional timeframe of 18 months for standard applications, as well as up to 36 months for challenging applications, such as those in the travel and hospitality sector.
This will deliver an EU-wide harmonised migration approach by the EBA and the 28 national regulators for remote card payments.
EPSM is calling for a minimum 18-month delay to the introduction of Strong Consumer Authentication rules, in order to avoid significant disruption to online business interests.
This is because the two-step verification process to be implemented for all online purchases over EUR30, EPSM believes members will not be ready for the switch, with merchants fearing widespread cart abandonment as consumers react negatively to more complex checkout procedures.
EPSM believes that the European Banking Authority’s acknowledgement that of the problem by allowing some firms, on an "exceptional basis", to get a limited extension of the September deadline does not go far enough.
The EPSM is calling for a much longer implementation period to solve the technical and operational challenges posed by remote card payments - for merchants, card holders, issuers, and acquirers. To avoid significant acceptance disruptions, EPSM recommends that all regions should agree an additional timeframe of 18 months for standard applications, as well as up to 36 months for challenging applications, such as those in the travel and hospitality sector.
EPSM believe that "This will deliver an EU-wide harmonised migration approach by the EBA and the 28 national regulators for remote card payments."
CTMfile take: Delay was inevitable. Expect more lobbying
Europe’s PSD2 ‘could re-direct fraud to other regions’
The European Union’s stricter requirements for prevention could result in more fraud in the US and elsewhere, claims a report.
Treasury Leaders Summit 1: PSD2 is end of charging for MT940s
Roundtable discussion at TLS shows the desperate need for global API standards AND that PSD2 will at least ensure charging
Netherlands’ slow progress on PSD2 adoption analysed
Reports suggest the country is lagging in developing open banking, despite Dutch digital proficiency and openness to new technology