{"id":58117,"date":"2018-07-03T08:30:33","date_gmt":"2018-07-03T07:30:33","guid":{"rendered":"https:\/\/blogs.dlapiper.com\/iptitaly\/?p=58117"},"modified":"2019-06-24T11:42:35","modified_gmt":"2019-06-24T09:42:35","slug":"fintech-boosted-by-italian-psd2-implementation","status":"publish","type":"post","link":"https:\/\/blogs.dlapiper.com\/iptitaly\/2018\/07\/fintech-boosted-by-italian-psd2-implementation\/","title":{"rendered":"FinTech boosted by Italian PSD2 implementation"},"content":{"rendered":"<p>The FinTech revolution reached a turning point with the implementation of the European Payment Services Directive 2 in Italy.<img decoding=\"async\" class=\"alignright size-full wp-image-56492\" src=\"https:\/\/blogs.dlapiper.com\/iptitaly\/files\/2015\/02\/Coraggio-Fusion.jpg\" alt=\"Giulio Coraggio\" width=\"67\" height=\"90\" \/><!--more--><span id=\"more-6656\"><\/span><\/p>\n<p>According to the estimates of\u00a0<a href=\"https:\/\/www.cbinsights.com\/blog\/goldman-sachs-fin-tech-startups\/\">Goldman Sachs<\/a>, \u00a0traditional financial institutions and banks might lose\u00a0$4.7 trillion in revenue to the benefit of fintech companies. Fintech firms are\u00a0<a href=\"http:\/\/www.economist.com\/news\/leaders\/21650546-wave-startups-changing-financefor-better-fintech-revolution\">not expected to kill off traditional banks<\/a>, but will act as\u00a0disrupters cutting costs and improving the quality of financial services.<\/p>\n<p>The FinTech revolution has now found a valuable ally in the PSD2.\u00a0I had already discussed in this\u00a0<a href=\"http:\/\/www.gamingtechlaw.com\/2017\/03\/fintech-open-apis-strong-authentication-psd2.html\">blog post<\/a>\u00a0about how the implementation of the\u00a0<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/HTML\/?uri=CELEX:32015L2366&amp;from=IT\">European Payment Services Directive 2 (PSD2)<\/a>\u00a0could represent an essential step for the future of FinTech in Europe and below is a snapshot of how it has been implemented in Italy.<\/p>\n<h2>Broader scope of payment services<\/h2>\n<p>The PSD2 considerably\u00a0<strong>extends the definition of payment services which now includes even companies providing \u201c<em>payment initiation services<\/em>\u201c<\/strong>\u00a0such as those FinTech companies enabling payments by watches, Apps and other devices.<\/p>\n<p>The goal is on one hand to control such entities and on the other hand to identify those companies that can exploit the benefits given by the PSD2. There are lighter obligations for less invasive services, but it is always difficult to find the right balance between regulating and over-regulating.<\/p>\n<h2>The revolution of the open APIs<\/h2>\n<p>The PSD2 provides for\u00a0<strong>the\u00a0obligation on entities like banks<\/strong>\u00a0to allow authorised third party providers to<\/p>\n<ul>\n<li>have access to their customers\u2019 account information and<\/li>\n<li>initiate payments on a customer\u2019s behalf<\/li>\n<\/ul>\n<p>regardless of the existence of an agreement between the provider and the relevant bank\u00a0<strong>upon the occurrence of very detailed conditions that are aimed at avoiding any discriminatory conduct<\/strong>, even between the services of the third party provider and the ones directly offered by the bank itself.<\/p>\n<p><strong>Such continous flow of data will occur through the \u201cfamous\u201d open APIs<\/strong>\u00a0to be set up according to technical standards set up by the European Banking Authority which represent the biggest change introduced by the PSD2.<\/p>\n<h2>Strong authentication, better protection or limit to FinTech growth?<\/h2>\n<p>The strong authentication (i.e.\u00a0an authentication based on the use of two or more elements) becomes a requirement to access and initiate payment transactions. The actual impact of such requirement that might have\u00a0<strong>a negative consequence on instantaneous payments<\/strong>\u00a0has to be assessed in the light of the technical requirements set forth by the European Banking Authority.<\/p>\n<p>Indeed, the risk is that some FinTech or in general payment services will not be available in Europe as the strong authentication would make them excessively burdensome.<\/p>\n<h2>Payment vouchers get a harder life<\/h2>\n<p>Vouchers (including gaming vouchers for instance) that could be used for payment in a closed network of shops, websites or locations enjoyed a full exemption under the previous regime. On the contrary, under the PSD2 they are still not considered e-money, but<\/p>\n<ul>\n<li>in case of entities for which the total value of payment transactions executed over the preceding 12 months exceeds the amount of \u20ac 1 million<\/li>\n<li>they are obliged to send a notification to the Bank of Italy according to modalities that are still to be determined by the means of a regulation of the Bank of Italy.<\/li>\n<\/ul>\n<p>We shall see how the Fintech market reacts to this new regulation and whether the new rules will represent an actual incentive for the growth of a sector which is definitely facing one of its major changes in its history.<\/p>\n<p>As usual, if you found this article interesting please share it on your favourite social media.<\/p>\n<p><strong><a href=\"https:\/\/twitter.com\/%3Cspan%20class='hiddenSpellError%20wpgc-spelling'%20style='background:%20#FFC0C0;'&gt;&lt;span class='hiddenSpellError wpgc-spelling' style='background: #FFC0C0;'&gt;GiulioCoraggio&lt;\/span&gt;&lt;\/span&gt;\">@<span class=\"hiddenSpellError wpgc-spelling\">GiulioCoraggio<\/span><\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The FinTech revolution reached a turning point with the implementation of the European Payment Services Directive 2 in Italy.<\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":"yes","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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