![]() ![]() This legislation gives EU consumers the right of ‘data portability’ and allows them greater flexibility of their financial information. The role of PSD2 in Open BankingĪn important aspect of Open Banking is the role of PSD2 (Second Payment Services Directive), which is a payments legislation introduced by the European Union in September 2019. This shift in payment channels has resulted in a fast-changing online banking industry that is predicted to double its revenue in only 7 years to reach over $20 billion by 2026. The growing popularity of tap-to-pay transactions, QR codes and other payment innovations has also continued to rise. Driven by the spread of COVID-19 in early 2020, those consumers moving over to online payments shot up by almost 50% and this was mirrored by digital banking usage. This has had a big influence on the online banking sector over 75% of banking clients in North America and Europe now carry out the majority of their transactions online. Digital channels have now fully emerged and there has been a huge increase in e-customers and especially mobile eCommerce. And as the digital generation has come of age, growing into mature buyers, it became inevitable that payment technology would transform and flourish. The pandemic of the last few years has accelerated this situation. ![]() It began with hard cash increasingly being replaced by card payments, and online shopping becoming the dominant way of life. The future of banking and payments is digitalĪ quiet revolution has been underway over the last 15 years or so in shopping, banking and payment processing. In short, it will lead to better banking and payments for all. That means transactions and other financial activities can be shared easily via APIs (application programming interfaces). A collaborative banking framework helps everyone take control of their banking activities and benefit from the latest financial service providers and innovative services. Open Banking technology is the secure new way for banking clients and merchants to manage their money better, enable direct payments, and cut out costly intermediaries.
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