- Posted by Michael McKee
- On 11 April 18
- AIS, ECJ, FCA, Interchange Fees, Open Banking, Payments, PIS, PSD2
On 10 April, the FCA published a speech by Karina McTeague, director of retail banking supervision at the FCA, on the future of payments following PSD2. The speech, entitled “Payments After PSD2: Evolution or Revolution”, was originally delivered on 1 March 2018 and looks at the future of the payments ecosystem from the regulator’s perspective.
In a view shared by this author previously, the FCA acknowledges that “13 January [the date PSD2 came into force] was never going to be the start of a revolution; it was never going to be a big bang […] From a regulatory perspective, we regard 13 January as simply a key milestone in a longer-term/bigger picture plan.”
The speech also touched on four forthcoming milestones:
- The fully operational Open Banking API for the CMA9 online current accounts and one-off payments
- The Regulatory Technical Standards on strong customer authentication and common and secure communication coming into force
- The General Data Protection Regulation (GDPR) coming into force
- The extension of the CMA9 specification for Open Banking APIs to all payment accounts covered by PSD2
The speech also provides further details about the FCA’s experience in relation to the new regulated activities under PSD2 of account information services (AIS) and payment initiation services (PIS), as well as setting out the FCA’s expectations in relation to other market participants in this area. At the date of the speech, 59 firms had applied to perform AIS and PIS activities, with 19 now having been authorised or registered to perform these. The firms tended to be PSD firms expanding into this area, or overseas PIS providers seeking to move into the UK, and covered a range of business propositions. The FCA also set out its expectations of firms operating in this sphere, including that the FCA expects banks and building societies to allow customers to use AIS and PIS without penalty, and should be balanced in their communications to customers (and not seek to dissuade them using such services in their communications or terms and conditions).
The FCA also use the speech to touch on the two PSD2 RTS that are currently outstanding (strong customer authentication and common and secure communication). The FCA welcomed the industry arrangements to facilitate implementation of PSD2, such as voluntary guidelines and dispute management systems, and encouraged firms to participate in the work towards adopting common standards around APIs.
In other recent payments developments, the ECJ has published two judgements in the Official Journal (2018/C 123/02 and 2018/C 123/06) on the interpretation of the Interchange Fee Regulation and PSD2 relating to multi-party payment card schemes and co-branding partners and agents, following referrals to the ECJ by the UK High Court.