Comment on the PSD

The Payment Services Directive (PSD) that came into effect on 1st November will have no direct effect on payment processors, such as Equens, particularly as we already meet its criteria for payment durations.

One of the key parts of the PSD is the opportunity for non-banking firms to apply to be a ‘payments institute’. This element aimed to enhance competition and give non-banks a kind of banking status.

After carefully weighing the pros and cons we have decided not to apply to be a payments institute. We provide services to banks as a payment processor; we are not competing with them.

The ‘payments institute’ initiative has prompted important discussion. Non-banking payment institutions do not need to comply with the high capital requirements of traditional banks, potentially putting them at an advantage as payment processors. Some could say this is not a level playing field. It’s now perhaps to be seen who is applying to be such a payment institute.

We are currently in a transformational period, where it will take time before many of the eurozone countries to implement the PSD into national law.

There is tremendous pressure for banks to streamline the business and save costs by focusing on core business lines. It’s a good opportunity for back office processing companies to provide outsourcing services, as well as sharing investment in the kind of technology needed for the single euro payments area (SEPA).

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