Payment transactions between consumers and businesses are subject to strict rules. The hottest topic in the world of payment transactions today is PSD2, the European Payment Services Directive 2, which governs both existing market players and new market entrants. Need help applying for a PSD2 licence? Or want to learn more about the statutory requirements payment services providers are expected to meet?

Whether your organisation is a new fintech or an established market player, BDO can tell you all about the aspects and challenges that are relevant to you.

PSD2: Payment Services Directive 2

PSD2 is the European directive that regulates payment services between consumers and businesses. The introduction of PSD2 has consequences for both existing market players and new market entrants, one of which is that providers of payment initiation services and account information services, which are new under PSD2, are subject to a licence requirement. What’s more, PSD2 makes additional requirements of a payment services provider’s licence application, for instance when it comes to IT risks and incident management procedures.

In addition, PSD2 imposes stricter continuing requirements on licensees. All payment services providers must be organised such that they meet the requirements of PSD2 and protect the interests and privacy of consumers. But they’re also expected to implement new controls for risk management and information security. Read more about this here.

Focus on continuity

Competition in the payment services market will do nothing but increase, especially now that fintechs are gaining access to the market. Consumers stand to benefit from this development. You can make life easier for them, as the Tikkie payment request app has done. The market, which used to be dominated by banks, is opening up more and more. As a result, organisations will have to be much more innovative and forward-thinking; capacity for change and digitalisation are the key words. The constant challenge will be to ensure the continuity of your organisation, your ability to continue as a going concern. New entrants have to fight to gain market share, a particularly difficult task because of the high costs involved. Existing players need to make sure that they stay relevant.

Compliance for new entrants and existing market players

If you’re a new entrant, you’ll need a licence before you can even start to offer any new payment services. This usually means that you’ll have to redesign your organisation and your governance structure. This may involve having to create a risk management function and a compliance function, as well as having to document and formalise procedures you’re following, for instance for hedging risks, but haven’t committed to paper before. This may have a fair amount of impact. After all, becoming compliant with these requirements involves extra work, extra resources and a different mindset.

If you’re already operating in the payment services market, compliance with these rules and regulations is not new, but regulatory pressures are increasing and supervision is tightening. ‘Compliance light’ will no longer do. That’s why you need to review your current standards and procedures on a regular basis; do your policies still meet the stricter statutory requirements and do you actually live by your own policies?

What BDO can do for you

We offer control. BDO has formed a multidisciplinary team of experts specialising in providing clients with broad PSD2 compliance support. The team is made up of experts in such fields as governance, risk management and compliance (the GRC domain), IT/cybersecurity and data protection.

Our multidisciplinary approach allows us to provide support in all these areas and offer an integrated approach to relevant issues. We can help you become compliant with the law in a way that’s appropriate to the stage of development your organisation is in, by providing support in the PSD2 licence application process or in the performance of your key functions (compliance, risk management and internal audit). We make sure you’re in control at all times.

Want to find out more about BDO’s personalised and pragmatic approach for payment services providers? Read this factsheet or contact one of our specialists. They will be happy to tell you about your options.