PSD2 and the Opportunity for Social

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Chase Buckle / January 10, 2018

Capping off our series marking the implementation of PSD2 (the EU’s new Payment Services Directive) into EU law, today we pinpoint one much-discussed sector which could see its presence grow in the retail banking space under the new regulation – social media.

Social’s major advantage under the new regulation is its ubiquity in everyday life – an average of more than an hour and a half is spent on social among EU Online Bankers each day, accounting for almost 30% of online time in total.

The prospect of aggregating personal banking information via a social platform or messaging app is already a reality in China with WeChat, while Western platforms like Facebook Messenger and Snapchat have offered in-app remittance services in the US for some time now. Facebook’s e-money license in the EU could help the platform move more heavily into the payments and banking space in this region. Importantly, PSD2 offers these third-party incumbents direct access to a bank account (with the consumer’s permission) and so the ability to offer innovative new banking services.

Whether this permission will be hard won remains to be seen, especially in the context of widespread privacy concerns. But there’s ample evidence illustrating consumer comfort with allowing brands and commercial organizations into their social experience.