PSD2: 5-months count down

It is only 5 months away from Payment Services Directives 2 (PSD2) strong customer authentication to be in effect in EU on Sept 14, 2019! I have started a series of posts to collect what’s going on with the ecosystem.

And of course, all thoughts expressed here belong to me and aren’t related to my employer.

What is happening since March?

It has been a quiet month as the major networks and processors have published their implementation guidelines around PSD2. (I do see a lot more PSD2 related whitepapers on LinkedIn feed lately.) Therefore, merchants (including your truly…) are likely all heads-down focusing on implementing all these new rules set forth by the networks to comply with PSD2, or talking to the banks / issuers to assess the impacts.

The problem is, no one quite knows how implementing all these rules (which is a pretty big undertaking) will actually move the needle in the auth rate after Sept. What is obvious though is that banks are still playing catch-up with the PSD2 Open Banking requirements, which was supposed to be enforced in last Jan. So when/if the banks will be able to cop with the new rules in their system is anyone’s guess (it is an interesting business opportunity though).

With EBA’s blessing on MIT as out-of-scope, It seem that what is more likely going to happen is that issuers will just approve/reject transactions based on the current configuration as long as it is marked as MIT, and they will learn from each other to…