How PSD2 Is Changing ING Bank’s API Strategy

Banks and merchants are racing to meet the Strong Customer Authentication (SCA) deadline as September 2019 approaches.

Banks are innovating their application programming interface (API)  platforms to allow for more third parties, while online merchants are prepping for a potential loss in revenue due to the security frictions that SCA might bring. Both are looking to maintain quick, efficient service to which end customers have become accustomed when it comes to online purchases and transactions.

Additionally, other companies are still working to change their platforms to comply with General Data Protection Regulation (GDPR) as that regulation continues to sweep across Europe. In the latest PSD2 Tracker™, PYMNTS examines how merchants and banks alike are dealing with SCA as the clock continues to tick.

Around the PSD2 and GDPR Worlds

Both banks and regulators are re-examining how exactly SCA will affect the financial ecosystem. As such, the European Banking Authority (EBA) has announced extensions for retailers that may require more time to comply. These extensions will only be granted to a select few retailers, however.

For the rest of these merchants, there are still a few ways for them to reduce frictions under SCA. Acquirer WorldPay, for example, has launched an Exemption Engine, which will allow companies to search for relevant exemptions that may help them better manage payments and authentication under the regulation.

For other companies, GDPR is the main concern as they move to expand operations within Europe. Social media giant Facebook is facing yet another batch of complaints around its practices in the region, with more claimants asserting it is not meeting GPDR requirements under the law. The company will address these allegations in Austrian court.

For more on PSD2 and GDPR, visit the Tracker’s News & Trends.

Why ING Is Taking A Platform Approach To PSD2 and Open Banking

PSD2 is creating greater interoperability between banks, but that leads to competition with third-parties as they offer customers more variety. That means banks may be forced to rethink the way they’re approaching their relationships with customers, Patrick Langeveld, innovation driver for open banking at ING Bank, told PYMNTS in a recent interview.

To learn  more about how ING Bank is approaching API innovation under the changing PSD2 landscape, visit the Tracker’s feature story.

Deep Dive: Retailers Brace For SCA’s Downsides

Fraud isn’t the only thing banks and merchants are concerned over when it comes to SCA’s upcoming deadline. With merchants and retailers now required under law to provide two-factor authentication to their customers, many are expressing concerns that this new added layer of security will compromise the user experience. Unhappy customers could, therefore, lead to empty carts and less revenue for these merchants. To learn more about how retailers are preparing for the downsides of SCA, visit the Tracker’s Deep Dive.

About the Tracker

The PSD2 Tracker™, powered by Ekata, is the go-to resource for monthly updates on the trends and changes regarding PSD2 and other privacy and data protection regulations.