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Interview with Gilles Grapinet, CEO Worldline, about PSD2

GrapinetA PSD2 interview with Worldline’s CEO, Gilles Grapinet, by Norfico.

On Saturday 13th January, the long-awaited Revised Payment Services Directive, PSD2, has come into force in all European countries.

The PSD2 is probably the most ground-breaking piece of legislation concerning the financial industry ever adopted by the EU. It has been debated endlesslyduring the past couple of years, and its impact on the financial industry – including the fast-growing fintech part – is anticipated with great excitement, mixed with a certain amount of fear and trepidation.

In this interview, we ask Worldline’s CEO, Gilles Grapinet, about his and Worldline’s expectations of the PSD2. And since Mr Grapinet considers himself a believer in the European project and Worldline is a truly pan-European payment leader, it probably comes as no big surprise that expectations for the near future are high, not only for Worldline, but for a wide range of players within the industry – including banks, merchants, and obviously fintech companies.

What is your overall view on the new Payment Services Directive? What is important about it and what impact do you expect to see from it going forward?

Grapinet: “The PSD2 is a game-changing regulation. It is not just another set of rules in the world of banking. It is a way to unleash the value of data – in this case of course banking and payment data – and it has the potential to create a new type of economy model for banks as well as for several other parties. During the last fifteen years, we have seen several examples of radically new business models based on access to data. The PSD2 brings the platform economy concept into banking, and nobody should understate what that means. Another key aspect of the PSD2 is security. The SecurePay initiative had introduced requirements to secure online payments. Now with the PSD2, security will cover all transactions through the reinforcement of customers’ authentication. Trust and security are essential in the digital world and the PSD2 will make users more confident in this new ecosystem. Read more

Paving the way for instant payments across Europe

ECBThis guest blog is written by Mehdi Manaa, Deputy Director General Market Infrastructure and Payments, European Central Bank.

The availability of a safe and efficient market infrastructure that can process and settle instant payments across Europe is one of the cornerstones of European payments innovation. In the context of the Eurosystem’s strategic review of the future developments of its market infrastructure and related central bank services, it was decided to develop a pan-European instant payment settlement service in central bank money. The TARGET Instant Payment Settlement (TIPS) service will be launched in November 2018.

TIPS establishes the groundwork for the smooth functioning of pan-European instant payments. It gives the market a basis for the provision of products and services that create value for customers and enables more competition among the payment service providers. Read more

Cybersecurity in bank increases customer confidence

cyber securityThe cyber threat, because of its widespread, uncontrolled and transnational nature, is one of the most concerning challenges for all organizations today. The most exposed countries are the Western ones, because they have sophisticated and IT-based critical infrastructures.

Looking at the annual Clusit report on ICT Security in Italy there are serious elements of concern. The increasing adoption of cloud-based services involves an outward opening of ICT systems, which traditionally tended to be kept closed or open to an ideally controlled sector ecosystem. Even the recent PSD2 legislation brings greater openness to much less controlled subjects and contexts. Therefore, this trend requires an approach that makes the principles of “security by design / by default” a pivotal point, in line with those that have always been security best practices in the industry. Read more

Host Card Emulation is the real breakthrough for mobile payments

mobile paymentsThe market for mobile payments has always been fragmented, because banks, telephone manufacturers and telecom providers all offered their own solutions. Mobile payments have therefore never gained traction with the majority. The introduction of Host Card Emulation (HCE) can be seen as a real breakthrough for mobile payments, because it unifies the market and can be deployed on a global scale. Recent examples of banks introducing mobile payments are Belfius Bank in Belgium and Postbank in Germany.

In this interview, Cezara Ceobanu, product manager HCE at equensWorldline, explains this technology and its contribution to mobile payments. Read more

The future? Banks become open ecosystems and collaborate with fintechs

ecosystemWith the introduction of the Payment Services Directive 2 (PSD2), data of the bank customer, after his consent, becomes practically a common good. As of January 2018, banks are obliged to open up bank account details to third parties. This makes the PSD2 perhaps the most disruptive and exciting development in years. This introduction, combined with the possibilities offered by new technologies, will create opportunities for innovation and new digital business models such as paying with social media. This changes the rules of the game and clears the way to a virtual open banking ecosystem.

Tech giants like Facebook, Airbnb, Uber, Amazon and Apple have all flourished in the open platform economy by providing a platform for third parties; a business model based on a combination of community, data and technology. This increases the value of the platform as soon as there are more people who use the platform. Moreover, this open ecosystem is much more powerful, because various platforms exchange information with each other. This is where it becomes interesting for the payment industry that is constantly challenged by disruptive fintechs. But what is the role of banks in this new economy? Read more

Why it is not wise to waste time with only a few months until PSD2 is the new reality for banks   

Open bankingWith only a few months left before the implementation, it seems that the general opinion about PSD2 can be divided in two sides. On the one hand, there are the banks and consumers who don’t trust companies with bank details. According to research by Accenture, a clear majority of Brits is unwilling to share their financial data with those companies. On the other hand, there are those who see the possibilities of the new open banking ecosystem, where the consumer is in control to share the data with selected partners he trusts. In this blog, I would like to focus on the possibilities of Open Banking and to explore the chances instead of the setting boundaries.

When PSD2 is being rolled out in January 2018, it will be an important step towards a fully interoperable digital market. Consumers will profit from better services by third-party suppliers based on their banking account information, but banks, in general, see an uncertain future. ‘Many bankers fear that PSD2 will cause them to lose control of the client interface and so remain unsure how to respond to the PSD2. As a result, they follow a defensive, wait-and-see stance that is risk averse’, according to recent research from PwC. Read more

SIBOS day 3 – How API’s can be the game changer for the financial industry

Sibos 2017The panel discussion on the third day of SIBOS revolved around open banking and API’s. It was titled as ‘Disruptive threat or innovative opportunity’. The panel was formed by Jonathan Davey (Executive General Manager, NAB Labs & NAB Ventures at National Australia Bank), Erik Zingmark (Co-Head of Transaction Banking at Nordea), Louise Beaumont (Strategic Advisor, Open Bank at Publicis.Sapient), Carolyn Burke (Enterprise Payments at RBC) and Michael Tang (Global Financial Services Digital Transformation Leader at Deloitte) moderated the session.

The panel session started with a question about the promise of open banking. Beaumont (Publicis.Sapient) kicked off by explaining the four drivers behind open banking: regulation, consumer behavior, technology and competition. In her eyes, open banking should be about the promise to the consumer: “In the future you should be able to use services based on what you are willing to share.” Burke (RBC) was convinced that, with all these new players and developments, everything is fine until something goes wrong. People then know where to find the banks. Read more

Sibos day 2- Although Blockchain is interesting, it is far from mature

Sibos 2017

Distributed Ledger Technology (DLT) should be a solution to address a particular problem and not a solution looking for a problem. That was one of the key messages during the session ‘Blockchain and payments: Lessons learnt and future prospects’ on the second day of SIBOS. The panel members discussed ‘the initiatives across the globe to further experiment with block chain technology in pursuit of the holy grail of a production ready Distributed Ledger Technology (DLT) payments solution’. This blog will summarize the session.

A big audience attended this session, which shows that Blockchain or DLT are important topics for the guests present at SIBOS. DLT was also mentioned as an important topic for the banks and other companies in the previous blog post on the instant international payments. In this session, the discussion between the panel members focused on the present initiatives and future role of Blockchain. Matthew Spoke (CEO at Nuco Inc) was the moderator, Shirish Wadivkar (Global Head, Correspondent Banking Products at Standard Chartered), Yuko Kawai (Deputy Director-General, Head of FinTech Center, Payment and Settlement System Department at Bank of Japan), Ivar Wiersma (Head of Innovation Wholesale Banking at ING), Manish Kohli (Managing Director, Global Head of Payments and Receivables at Citi) and Carolyn Wilkins (Senior Deputy Governor at Bank of Canada) formed the panel. Read more

SIBOS day 2 – A discussion about the role of payment infrastructures in the era of instant

Sibos 2017On the second day of SIBOS, equensWorldline’s CEO Michael Steinbach was present during the panel discussion. The topic of the discussion was ‘Complementary or competitive? The role of payments market infrastructure and correspondent banks in instant international payments’. This blog is a summary of the panel discussion.

The session was moderated by Lisa Lansdowne-Higgins (Vice President Business Deposits and Treasury Solutions at RBC). The panel members were Andrew Brown (Chief Risk Officer at Earthporth PLC), Michael Bellacosa (Global Head of Payments at BNY Mellon), Leila Fourie (CEO at Australian Payments Network) and Michael Steinbach (CEO at equensWorldline). Read more

SIBOS day 2 – Banks should learn the lessons of telco operators to fully exploit the potential of PSD2

Sibos 2017Retail banks should position themselves as the every day digital bank with strong customer relations and provide services throughout the lives of their clients, support key events such as student loans, providing mortgages and pension plans. If they choose otherwise and follow the example of the telephone companies they may end up as a pure utility. That was the key message of Thomas Feiler (Manager Product Management Global Payments at equensWorldline) during his presentation on PSD2 at the second day of SIBOS.

His presentation ‘Unlocking the potential of PSD2’ focused on PSD2 and why banks should see this as an opportunity rather than as a threat. One of the main reasons for PSD2 was to enhance innovation. But PSD2 is not the only regulation and development within the payments industry. The combination of regulation such as GDPR and eIDAS with trends like Open Banking and Blockchain cause further complexity in the payments industry. Feiler: “For any party it is of the essence to deal with this in a cost-effective way and come to simple solutions.” Read more