Banks and FinTechs in the European Union have settled into a period of harmony with the revised Payment Services Directive (PSD2).
These financial institutions (FIs) have recognized how this regulation has affected the EU financial ecosystem, and they have passed that familiarity onto the merchants and payment providers that work with them. Only 22 percent of EU merchants have not taken steps to respond to PSD2 or Strong Customer Authentication (SCA), for example.
Banks and regulators outside of the EU are also growing more interested in the changes wrought by PSD2, in some cases crafting rules of their own that will impact their own banking ecosystems. Regulators are looking to PSD2 as a blueprint as they seek to innovate the way they treat online consumer data, privacy and security in their own regions.
In the Merchants Guide To Navigating Global Payments Regulations, PYMNTS examines the latest PSD2 developments as well as how the regulation may have impacted further regulatory changes in countries including the U.S. and Turkey.
Around the Data Protection and Security World
The EU is no longer the only region looking to upgrade its data and financial protection legislation. Several other countries are following its lead, such as the U.S., where several states, including California, are developing new regulations designed to upgrade the way they treat online data and transactions. The California Consumer Privacy Act will come into effect in 2020, and its applications are already being hotly debated by the FinTechs and startups that have made the state their base of operations.
Other U.S. regulations that could impact data privacy within the country include the Mind Your Own Business Act, which is a federal proposal that would change the way privacy and consumer data is treated countrywide. The rule proposes granting more data and consumer security responsibilities to the U.S. Federal Trade Commission (FTC), among other changes.
PSD2 itself is continuing to expand its reach as well. One of the latest countries to adopt PSD2 is Turkey, where its parliament just passed support for open banking regulations. The move will enable third parties and FinTechs to innovate within the country. Banks and payment providers remain optimistic regarding the effects of open banking. The country is viewing open banking as an opportunity for economic growth and further financial development by its existing banks and companies, according to business consortiums and other players within Turkey.
For more on this and other stories, visit the Tracker’s News and Trends section.
PSD2 and the Turkish Banking Opportunity
Turkey recently became one of the first countries to adopt PSD2 in 2020, and the world will have to wait to see the effect the rule will have on the region’s financial ecosystem. The Eastern European country is not a member of the EU and thus does not have to adopt every directive of PSD2, which means that Turkish banks may have a few advantages over third-party companies and FinTechs that wish to enter the region, said Soner Canko, CEO of Turkish bank consortium Bankalararasi Kart Merkezi in a recent interview with PYMNTS.
To learn more about the potential impact of PSD2 on Turkish banks and FinTechs, visit the Tracker’s Feature Story.
Why Open Banking Could Signify Deep Changes in Turkey
Turkish banks are in a surprising position when it comes to PSD2: They are ready for it. The country’s implementation of PSD2 has been highly anticipated by the financial world both in and outside of Turkey, and FIs within have had ample time to prep for the changes the rule will bring to their online banking ecosystem. There are still some outstanding questions these banks will need to answer before the deadline hits, however. To read about how Turkish FIs and FinTechs prepared for the regulation’s deadline in advance, visit the Tracker’s Deep Dive.
About the Tracker
The Merchants Guide To Navigating Global Payments Regulations, powered by Ekata, is the go-to monthly resource for updates on the trends and changes regarding PSD2 as well as other privacy and data protection regulations.