Skip to content

PSD2 is approaching – where are we at?

Today, banks have exactly one year to implement the new PSD2 payment service directive. Innovations and preparations have already been seen in the banking sector, but the service provider segment remains a mystery.

PSD2 is one of the largest legislative changes to banking in history. For consumers, the essential aspect of the directive is that it forces banks to open an API to the customer’s account for merchants or payment service providers if requested by the customer. The directive also makes strong two factor authentication of the customer mandatory for online purchases.

The legislator’s goal has been to encourage innovation in the sector and improve the opportunities for service providers to meet the changing needs of consumers. Payment services have probably been in need of an overhaul for a long time, but now, PSD2 seems to have given services the push that they have needed for real development.

A good example of a PSD2-compliant and consumer-friendly service in Finland is the Siirto transfer service that will be opened by Finland’s largest banks in early March. Siirto can be used in applications and online banks or when paying in a shop and is very close in functionality to  Swish, popular in Sweden, or MobilePay, a service that has already gained popularity in Finland.


Startups and SMEs seem to be more aware of the potential of PSD2, while the big players are only now starting to look into the matter. Many service providers may be waiting to see how the directive will be implemented in practice.

The banks’ role in the directive is clear, and it appears that the change will be implemented without major technical complications. However, several questions remain open regarding the implementation of the directive, and this is having an impact on the arrangements being made by service providers.

For instance, both service providers and consumers will be interested to see how banks will arrange for smooth two-factor authentication. At present, the protocol is still suffering from many teething problems in Finland.


Many have predicted that PSD2 will pose a significant threat to the profits of banks. To consumers, however, the impending directive has mostly been noticeable as increased supply in the personal finance sector. As of yet, no mainstream services that would realize these threats or undermine the position of banks have been launched or announced.

It may be that PSD2 will ultimately have more impact on the mutual organization of banks rather than the competition between banks, merchants and payment service providers.

Are you a payment service provider? Would you like to know more about the possibilities of PSD2? Contact us and let’s talk more!