In short, PSD2 was designed to promote payments innovation. It allows new players to access customers payments accounts, increasing competition, lowering cost for customers and optimising user experiences.
When we buy something online we typically enter our payment details into the merchants website, and the merchant then gets the money from your bank account by mean of a few intermediaries.
With PSD2, the Directive allows retailers to ‘ask’ consumers for permission to use your bank details. Once the customer gives permission, the retailer will receive the payment directly from your bank – no intermediaries.
Connections between retailers and banks will be enabled using Application Programming Interface or APIs. Thread Solutions is specialised in API management. We build solutions that are PSD2 compliant and serve innovative companies that want to build platforms that connect directly to financial institutions, for example multi bank platforms that assemble all information of different banks in one platform increasing user experience.
Advantages of PSD2:
-> lowers costs for consumers
-> uses the power of API
-> connects multiple platforms and services
-> increases user experience