PSD2 happened, what is the landscape now?
Since the introduction of the EU Payment Service Directive (PSD2), the banking and payment industry has seen a rapid change. Online services, regulated by local authorities (like FCA in the UK and Finansinspektionen in Sweden), are now able to request, access, and process customers’ financial information given explicit consent.
Under the new directive, third-parties can provide services and access account information under two separate licenses; Payment Initiation Service Providers (PISP) and Account Information Services Provider (AISP).
In this article, we’ll explore how the industry is changing following the introduction of PSD2 and how corporate card providers can team up with fintech companies to meet customer needs – and do so fast. But first, let’s begin by clarifying the two licenses and what they entail.
What is PISP?
Companies certified with the Payment Initiation Service Providers (PISP) license, can connect to a bank account and initiate payments with permission from the customer. Common PISP services include financial management tools and payment management solutions.
What is AISP?
Account Information Service Providers (AISP) get, with user consent, access to account- and financial information from multiple banks and are authorised to display the data in one online solution or application.
Common AISP services include money management tools, price comparison solutions, and expense management platforms, like Findity. Learn more about our AISP license.
How is the banking and corporate card industry changing?
The PSD2 directive does not only open up business opportunities for AISP and PISP players acting on the financial scene, but it also drives the customer demand for innovative, modern, and easy-to-use financial services.
Now, when banks no longer hold the monopoly of developing financial services that integrate with the banking system, end-users can turn to new innovative players to meet their demands. Players that drive innovation based upon the PSD2 directive, without having to own the end user’s bank account, and therefore are much quicker to develop niche products and services tailored to a specific user need.
An area with a high speed of innovation is the corporate card space. Many new niche players dive into this space disrupting the traditional bank-issued corporate cards services, by adding services and automation capabilities – often in the area of expense management and reimbursement processing.
Traditionally, businesses are offered corporate card deals by the big banks, often packaged together with other financial services provided by the bank of choice. However, now we see innovative niche corporate card players attracting customers, looking for a better corporate card offering, however, not willing to switch banks.
The innovation within fintech allows businesses to adopt a best-of-breed approach picking the best niche services there is but still keeping the corporate bank of choice.
Partnerships, the new path to meeting user demands
A successful approach more and more often adopted by the big traditional players to meet this type of competition is to partner with a niche player. The niche player can keep the speed of innovation high, quickly adapting to changes in user needs, while seamlessly integrating with the banking system under the PSD2 directive.
White-label partnerships – where a niche player delivers the tech solution under the brand of a big traditional player – will get the best out of two worlds, quickly meeting specific user needs, while providing the confidence and credibility of a prominent financial institute.
Want to learn how our expense management platform can help your business grow?
Let’s look at some of the key challenges banks and card providers face, and consider some ways in which they can keep evolving – in line with their customers’ changing needs
We stand on the threshold of a digital revolution: one in which sectors as diverse as retail and financial services are adapting – or dying. This is true for businesses operating across both B2B (business-to-business) and B2C (business-to-consumer) markets. But while it may appear that it’s ‘everyone for themselves’ right now, many companies are finding that collaboration is the best way forward.
We turned to some of our expense management partners who strongly believe in the benefits of digital receipts within expense management, to ask why they think it’s essential to enable digital receipts in their solution and which benefits their customers’ experience.