The PAYTECH Book

Is Europe a Good Example of Open Banking?

By Rachel Gauci

Head of Legal & Compliance, Truevo Payments Ltd

At the time of writing, most account servicing payment service providers (ASPSPs) in Europe are scrambling to ensure that their application programming interfaces (APIs) are ready for testing by the deadline, in accordance with the EBA’s Regulatory Technical Standards (RTSs) on Strong Customer Authentication and Common & Secure Communication. Despite the fact that the second Payment Services Directive (PSD2) sought to harmonize the payment services industry, fragmentation is still widespread. Some Member States have also decided to take on this daunting ASPSP task at a national level, with the national central bank taking a leading role, which exacerbates this fragmentation. Various API standards have emerged which have also contributed to the fragmentation, despite the fact that the two particular sets of standards have been pushed to the forefront. The API Evaluation Group sought to curb this fragmentation and published an API functionalities document on 10 December 2018 to serve as guidance.

Certain regions around the world have used Europe’s PSD2 as their inspiration to move the banking world into the modern digital age with the concept of open banking, or as PSD2 refers to it “access to accounts” also known as “XS2A”. Whilst such regions may have sought inspiration from Europe, perhaps Europe could see how other countries or regions in the world are handling the