Launched 14th of September 2019, the European Second Payment Service Directive (PSD2) has now been in place for more than three years. Time for ndgit to have a look at the statistics, insights and outlooks of its PSD2 solution with the usage from Europe’s major banks in 36 productive instances and eight countries in EU and UK.
Facts & figures of PSD2 after three years of practice
75% growth of PSD2 API usage in H1/2022
PSD2 API usage is growing with new upcoming users and increasing usage of TPP products. This shows a still existing hunger for Open Banking.
Having had 602% growth of PSD2 API requests in H1/21 and 134% in H2/21, the development continued with 75% growth in the first half of 2022. We assume this to come from an increasing number of established PSD2 use cases and a growing demand of end-customers for the new services.
Steadily growing API requests on the production systems of our customers
86% increase of third parties (PSD2 API users) in 2022 mainly driven from banks
While 83% of PSD2 API users are banks, TPPs/ non banks are initiating 96% of the API-requests. This indicates that TPPs still have the more mature PSD2 use cases.
Active PSD2 API users on production increased especially on the bank side
After a strong increase of accessing API users of 250% in 2021, the growth continued with 86% in 2022 (until eoQ3). While the growth in 2022 was mainly driven by the number of requesting banks coming to a total of 270, they only contribute 4% of API traffic. On the other side the number of TPPs declines to 55 but origin 96% of the PSD2 API requests. We assume that we can see that banks are only experimenting with few use cases like multi-banking while the TPPs have the more mature models on their side. The decline of TPP can also be a first sign for a consolidation in the TPP market.
Distribution of accessing API users and their associated API traffic for 2022 (until eoQ3)
Top 10 PSD2 API users initiate 92% of the traffic.
Most of PSD2 API requests are coming from few users with two TPPs being far beyond all others. This can also be a sign of a consolidation in the commercial use of PSD2 APIs.
While the Top 10 PSD2 API users cause 92% of the traffic, we can further see a stable growth among the top five PSD2 API users which are all non-bank but only the two top TPP have a significant development over time. We see this as an indicator for a selection of PSD2 business models ending up with few TPPs having a mature proposal and a broad end-customer demand.
The distribution of API requests per top 5 API users in 2022 (Q1-Q3)
92% of PSD2 API requests affect Account Information Services (AIS)
By far the most used PSD2 service is AIS, while Payment Initiations services (PIS) are much less relevant. For confirmation of funds (FCS) there seems to be no practice relevant use case as of today.
AIS is with 92% of all API requests by far the most used service also having a constant growth, for PIS there is only slight increase from few players while FCS s hardly used at all with a total of 150 API requests in 2022. This indicates that the idea of the need of a funds confirmation service for payment instrument issuers did not come true.
The distribution of API requests per API service
Updates from the PSD2 Regulation
Mandatory SCA Exemptions
A new adjustment of EBA’s RTS has now been published in the Official Journal of the EUon the 5thof December 2022 andforces banks to change or extend their strong customer authentication capabilities andthus support SCA exemptions.
SCA exemptions become mandatory for AIS use cases together with some pre-conditions.
The period after which an SCA for AIS has to be renewed prolongs from 90 to 180 days.
The change is reasoned with the inconsistent application of the exemption across the market resulting in frictions for TPPs and end-clients. Clients of ndgit will be able to realise the change of their PSD2 APIs with our product by adjusting the configuration, enabling recurring consents and allowing for account access of 180 days.
Names of Account Owners and Users
Update on the latest Berlin Group PSD2 API specification change from 1st July 2022 now allowsbanks to provide TPPs with ‘account owners’ and ‘usernames‘ in some cases.
The EBA clarified in a multi-stage Q&A on its website that banks need to provide the same information in AIS and PIS use cases to the TPPs as the end-customer might see in his digital banking. This includes the name of the user who executed the use case and did SCA, e.g. an employee or authorised signatory. Based on this, Berlin Group published an extension in Version 1.3.12 to return PSU (payment service user) names besides the account holder names. Clients of ndgit PSD2 Compliance will receive the according feature with the next release.
From PSD2 to PSD3?
PSD2 is evolving as European Commission made consultations on the PSD2 success to identify open issues and amendments. TPPs and banks can prepare their minds on future adjustments.
European Commission conducted their consultations on the PSD2 from May until August 2022. Besides (1) a targeted consultation on the review of PSD2 from professional stakeholders there was also (2) a public consultation on the application and impact of PSD2 addressing the general public and a broad range of stakeholders. In addition, the EU Commission also started (3) the targeted consultation on Open Finance to get a better understanding of the public views on Open Finance market developments, user needs and possible future adjustments. Reactions and results from the EU commission with amendments or a path to a PSD3 are expected for 2023.
about ndgit
ndgit is an Open Finance pioneer and supports many of Europe’s major banks to open-up and connect their banking systems via PSD2 APIs to TPPs. The PSD2 Compliance software of ndgit is a standard SaaS solution which covers the regulatory PSD2 API requirements towards banks in a highly efficient and secure way. It supports the most established Berlin Group standard as well as all regulatory requirements of the EBA. The feature set can be modularly configured to the requirements of a bank and is extendable for future Open Finance solutions. More than 30 banks in Europe like BAWAG, Credit Suisse, Solarisbank, UBS or Volkswagen Financial Services implement their PSD2 APIs with ndgit.
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