PSD2
ONLINE ID & STRONG AUTHENTICATION
IN TURMOIL
How will the changing
operating environment and
regulation change the market?
Company Background
● Mobile authentication specialist company, founded 4/2010
● Helping banks, telecom operators and other consumer online services to secure their services and end users
● MasterCard Start Path company, customers and partners globally
● Venture funded from Finland, US & HK
New regulation, new deal
PSD2● Strong authentication● Extends the scope to most
PSPs● Lowers the barriers to entry● Opens bank data to 3rd
parties
eIDAS● EU wide eID schemes● Cross border identification● E-signatures will have the
same legal weight as their physical counterparts
● Opens up the eID market
PSD2 timeline
2013 2014 2015 2017
European Commission proposes to
review the PSDPreparations
EU parliament agrees to the
revised directive Law comes into force in Member
States + 24 kk
2016
EBA's technical PSD2 recommendations
EBA's guidelines for e-payments
19.12.2014
ECB's recommendations
for e-payments 31.1.2013 1.8.2015
Changing roles in the value chain
• Account Servicing Payment Service Provider (ASPSP)● Consumer's bank, current issuer
• Payment Initiation Service Provider (PISP)● Initiates the payment process, seller or PSP
• Account Information Service Provider (AISP)● Consolidates customer's data, ”cross-bank”● AISP can be a totally new actor
PSD2 defines interfaces between various actors and opens up the value chain for new actors
PSD2: E-payments value chain
Seller Acquirer:Worldpay,
Bank,...
Card company
Customer
Payment enabled by PSD2
Card payment today
MoneyAuthentication
MoneyCard details
Seller,PSP
(PISP)
CustomerCustomer's
bank
Issuer:Customer's
bank
Acce
ss to
ac
coun
ts (X
S2A)
Security:Country specificBank specific
Security:PSD2 & EBA technical specs. Strong authentication
PSD2: E-banking transactionsTransactions enabled by PSD2E-banking today
Account informationAuthentication
CustomerCustomer Bank 2
Bank 3
Bank 1
Bank 2
Bank 3
Bank 1
AISP• Consolidates information into one service• Potential disruption point
AISP
Acce
ss to
acc
ount
s (X
S2A)
AISP – new opportunities with PSD2?Transactions enabled by PSD2E-banking today
Account informationAuthentication
CustomerCustomer Bank 2
Bank 3
Bank 1
Bank 2
Bank 3
Bank 1
AISP
Acce
ss to
acc
ount
s (X
S2A)
All-in-one bank service
opportunities
PSD2 brings Web UX to finance
MP - My Bank
Google MoneyWould like to connect to your account. Please select the information which Google Money can obtain:
Savings account infoLoansSecurities
AllowCancel
x~
Note: illustrative example only
Notes about PSD2 payments
• PSD2 expands the reach of online payments● As many as 60% of the European consumers don't
own a credit card
• PSD2 simplifies online payments● Potentially less players in the value chain● Potential savings to merchants and consumers
● New entrants may enter the payment market● PSD2 accelerates competition in payment services● ASPSPs must open APIs to other PSPs
Responsibility of the PSP
● Strong customer authentication ● Must include elements linking the authentication
to a specific amount and payee (dynamic code)
● User privacy● PSP must protect users’ personalised security
credentials.
● PSPs are required to find evidence against fraud● If the customer denies a payment transaction, PSP is
obliged to provide proof - or refund
authentication and authorization
Fast. Mobile.
Secure.
Software smartcard in Your app!