Episode 90 – PSD2 Enables Fintech Competitors – Myles Stephenson, Modulr

George Peabody

April 12, 2019

POF Podcast

The U.K. and the EU take a very different approach to payments industry evolution than here in the States; the former directed by government mandate, the latter by marketplace dynamics and the lighter touch of regulators. But both are responding, at different speeds, to the need of fintechs and enterprises for access to bank-based data and services.

The Payment Services Directive 2, PSD2, written in 2015 and in effect since January of 2018, addresses a range of concerns including a ban on surcharging on card payments and limiting consumer fraud liability exposure from 150 to 50 euros. But its major impact is its enablement of Open Banking through the granting of access to payment rails and payment data managed, up until PSD2, only by banks. Banks are required to open up programmatic access, via APIs, to that data.

In this Payments on Fire® episode, we dive into the U.K. and EU experience with the PSD2 a year after it going into effect. We take a look at its impact on Open Banking, the opening up of payment rails to these fintechs and other non-bank players.

To do that, Myles Stephenson, CEO of B2B payments firm Modulr, discusses his firm’s experience as an Electronic Money Institution, an organization chartered by the U.K.’s Financial Conduct Authority (FCA) under PSD2 rules. Under its provisions, Modulr gains, or will gain, the ability to initiate payments on behalf of its customers as well as access customer data.

While incumbent financial institutions are hardly thrilled at the prospect of opening up their systems to fintech competitors and the cost of doing so, the operational improvements for customers and increase in competitive activity are expected to generate many benefits.

Recent Payment Views

Payments Post #14: Wallet World – WWDC, VFC, Tokens, and the Future of the “Card”

Payments Post #13: At the Intersection of Tech, Regs, and Business Partnership

This month, Cici Northup joins regular contributor Justin Pituch to recap positive news in the form of fast payments growth, new fraud mitigation strategies, and evolution in cross-border transfers. All reflect, to varying degrees, the unique dynamic in the payments industry created by the intersection of technology, regulation, and new business partnerships.

read more
Visa Payments Forum Deep Dive: Visa Flexible Credential

Payments Orchestration: What Comes Next?

Orchestration providers have certainly come a long way, and can enable powerful capabilities and benefits for the merchants that employ them. This post explores some of the possibilities Glenbrook has been thinking about for where Orchestration (and even orchestration) can go next.

read more
Payments Post #14: Wallet World – WWDC, VFC, Tokens, and the Future of the “Card”

Payments Post #12: Lessons from Change

In this month’s Payments Post, we want to draw your attention to several recent fraud incidents that underscore the criticality of effective risk management to your business and the safety and soundness of the payments industry.

read more

Glenbrook Payments Boot CampTM

Register for the next Glenbrook Payments Boot CampTM

An intensive and comprehensive overview of the payments industry.

Train your Team

Customized, private Payments Boot CampsTM workshops tailored to meet your team’s unique needs.

OnDemand Modules

Recorded, one-hour videos covering a broad array of payments concepts.

GlenbrookTM Company Press

Comprehensive books that detail the systems and innovations shaping the payments industry.

Launch, improve & grow your payments business