PSDIIaPSP’sperspec+ve

ACAMSsessionGastonAussems13oktober2015

Short introduction to Mollie

v  (Collecting) Payment Service Provider

v  Full set of payment methods

v  Technology driven and service oriented

v  European Payment Institution, PCI DSS level 1 certified

v  Serving around 17.000 merchants in 15 countries

v  Established since 2004, based in Amsterdam (NL)

Mollie

Mollie’s view on the PSD2

v  Impact of PSD2 will be amplified by other legislation and develop-ments such as instant payments (national solutions!) and eID

v  Disruptive impact dependents on Regulatory Technical Standards (RTS) which are still to be worked out – complex!v  RTS will be high level

v  First signs of European divergence

v  Seemingly strong focus on reducing power of (card) payment schemes and transforming card to giro paymentsv  Directive will take on elements of payment scheme

v  Who will be the scheme manager?

Mollie

Which scenario will unfold and what will be the main drivers?

Mollie

Transac'onservicesOnlypaymentdata

SingleinterfaceacrossbanksLowcosts

ManynewentrantswithpaymentrelatedfuncFonality

Ba.leforthecustomerDataonallassetsandliabiliFesavailableSingleinterfaceacrossbanksandotherFI’s

LowcostsManynewentrantswithfocusondata

aggregaFonandtransacFonfuncFonaliFes

StatusquoOnlypaymentdata

ManyinterfacesrequiredHighcosts

NewentrantstosolvefragmentaFonandotherstoofferpaymentfuncFonaliFes

Hopeforbe.er'mesDataonallassetsandliabiliFes

ManyinterfacesrequiredHighcosts

NewentrantstosolvefragmentaFonandotherstooffernewfuncFonaliFes

Minimalcompliance(slowadopFonandminimalcompliance)

BankOS(fastadopFonaimedat

fullyopeningupthebank)

Uniformity(strictstandardizaFonaround

funcFonality,informaFonexchangeandsecurityacrossbanks)

FragmentaFon(everybank/countryhasit’sown

interpretaFonofstandards,it’sownimplementaFonandrequires

separateTPPcontracts)

Implem

enta'o

nofth

eRe

gulatoryTechn

ical

Stan

dardsb

ycoun

tries/market

Adop'onby(majorityof)bankingsector

Impacts and opportunities

v  Relatively easy to set up own payment scheme, especially in combination PIS - instant payment – AIS

v  Efficient value added services related to eID, reconciliation, automated cash management

v  Lower costs due to:v  Fewer integrations with banks in Europe

v  Less transactions via expensive card networks

v  Higher costs due to:v  More fraud

v  Measures against AML/CFT

Mollie

Existing players will startoffering services in line with XS2A

Mollie

Source:Innopay

v  How will the competitive landscape evolve and how will banks respond?

v  Should PSPs look beyond payments (eID, account information)?

v  What are new revenue sources of the future?

v  Should PSPs offer consumer side services?

v  Will merchants integrate directly with banks?

PSD2: Payment schemewithout scheme manager?

A payment scheme (e.g. iDEAL, MasterCard) defines:

v  Customer authentication

v  Payment authorization & processing

v  Exchange standards

But also:

v  Branding

v  Audits and certification

v  Fraud prevention

v  Dispute resolution

Mollie

Addressed by the PSD2 or to be further specified in Regulatory Technical Standards by EBA

What is the impact on trust of customers in online payments if not addressed properly?

Current payment schemes safeguard integrity of transaction flow

Mollie

Acquirer

PSP

Merchant

RulesandcerFficaFon

Acceptancecriteria

Issuer

Card-holder

Coveredbylawandschemerules

v  Acquirer, issuer and PSP are regulated both by law and scheme rules

v  Scheme rules prevent multiple PSP’s providing services to each other

v  UBO must be known in every step of the transaction

v  Measures against AML, CFT and merchant transaction laundering

v  Active monitoring on merchant activities that damage trust of consumers and merchants in payments

v  Fees are charged to cover for risk and brand and reputation management

PSP

How will PSD2 deal withthese challenges?

Mollie

Bankmerchant

Merchant

Bankconsumer

Account-holder

PIS/AIS

PIS

PIS

AIS

v  Who initiated the transaction?

v  In case of fraud, who is liable?

v  Who is responsible for accepting the merchant?

v  Will the UBO always be known?

v  How will the customer recognize a reputable payment service?

v  Who will resolve disputes?

v  Who charges what to whom and for what?

Questions

Explain

Who

What

When

How

Why

Where

Why

Who

Explain

Where

How

What

When

Mollie