INTERVIEW New Regulation
“The continuing trend towards open banking is changing the competitive face of the financial industry. “
Renat Zubairov, CEO and co-founder of elastic.io
Taking Payments?
The European Payment Services Directive (PSD2) has been updated with a new set of requirements designed
to combat fraud, increase efficiency and drive innovation by improving customer identification and payment
processing transparency. Comms Business talks to two channel players on the subject
The deadline for PSD2
implementation is
fast approaching but
the guidance to date,
especially for certain sectors
and use cases, has been a bit
vague. So, what does this mean
for your business? What is
changing?
Explaining what is changing
is Tom Davies, Technical
Director and Head of R&D at
Ultracomms who also has a seat
on the Contact Centres Council
for the Direct Marketing
Association in the UK.
“From 14th September
2019, additional customer
authentication is required for
certain types of payments.
Merchants that haven’t
implemented support for these
requirements in time may face
declined customer payments.
Online and face-to-face
point of sale transactions, where
the cardholder is present to
provide their details, will be
subject to additional checks.
e customer may be asked to
provide an additional ‘factor’
of authentication to prove their
identity; by using chip and
PIN for otherwise contactless
payments, or with a security
code sent to their device or
generated by their banking app,
for online transactions.
is is referred to as Strong
Customer Authentication
(SCA) and will be applied if any
of the following conditions are
met:
• e value of the transaction
exceeds €50
• e cumulative limit of
consecutive contactless
transactions exceeds €150
• e number of consecutive
contactless transactions since
the last application of SCA
exceeds ve.”
e requirements for Strong
Customer Authentication do
not apply to payments made
over the telephone when the
cardholder is not present. So,
that’s good news?
Davies is cautious when he
says, “Well, yes but merchants
that, for example, process
payments by writing details
down and use an online
consumer channel to process
the payment, or any other
non-compliant process, will be
caught out by these changes if
additional authentication, that
only the customer ‘knows’ is
requested, further reinforcing
the need to be compliant with
the Payment Card Industry
Data Security Standard (PCI
DSS).”
Is PSD2 revealing any new
opportunities for channels?
Renat Zubairov, CEO and
co-founder of elastic.io, says,
rather than continuing the
trend of previous regulatory
requirements to tighten the
banks’ operational models,
PSD2 aims to increase
competition, innovation
and transparency across the
European market.
“Critically, it requires
banks and ntechs to open
their payments infrastructures
and customer data to third
parties creating exciting and
widespread opportunities
for ISVs to develop new and
innovative services across an
expanded banking landscape.
e continuing trend
towards open banking is
changing the competitive
face of the nancial industry.
Services will be able to be
oered by a broader range
of traditional nancial
institutions, as well as new
entrants such as technology
companies, retailers,
telecommunications providers
and even crowdsourcing
platforms. With PSD2, any of
these companies will be able to
initiate online payments directly
from the payer’s bank account
via an online portal, creating
a host of new opportunities in
online transactions.
Time and cost to market for
new consumer products and
services will become even more
under pressure in the post-
PSD2 marketplace. And new
opportunities for collaborations
with third party providers will
boost customer service and
operational innovation.”
In all of this, who is keeping
an eye on what the customers
are actually looking for?
Zubairov believes that
competition will be more
aggressively fought on the
battleground of customer
satisfaction,
“is will increasingly
demand real-time, personalised
and seamless service oerings
and require an agility that
pushes traditional banks
to break out of their siloed
operations. Organisations that
fail to integrate service oerings
and back end data will miss out
on opportunities for enhanced
service, cross selling and
upselling oerings to customers.
It also signals a move
away from closely-guarded
proprietary systems in
traditional nancial institutions
towards a more scalable
and exible SaaS-based
infrastructure. is aims to
make the organisation more
agile and responsive to market
forces and customer demands.
Interoperability is the
keyword in the post-PSD2
nancial services environment.
For banks, it means the ability
to build third party capabilities
into their core oerings to
improve and expand core
service oerings to retain and
grow their customer base.”
40 | Comms Business Magazine | September 2019 www.commsbusiness.co.uk
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