PSD2: German regulator rules restriction of e-payment services by banks violates competition law

With PSD2 looming, German regulator Bundeskartellamt has ruled that the country's banking industry is violating competition law by putting up barriers that hinder competing online payments services.

The revised Payment Services Directive is designed to create a more level playing field for third party payment processors (TPPs) by making banks in Europe offer application programming interfaces (APIs) that provide access to account information to third parties.

The Bundeskartellamt says that Germany's banks and savings banks are violating both German and European competition law by enforcing "special condition for online banking" that mean customers cannot use their PINs (personal identification numbers) and TANs (transaction authentication numbers) in non-bank payment systems.

This stance has "significantly impeded" the use of non-bank providers for online purchases, preventing people from using lower-priced alternatives, says the Bundeskartellamt.

The banks argue that their rules are designed to ensure the security of their online customers but the Bundeskartellamt has dismissed this, with the watchdog's president Andreas Mundt saying that "the rules currently used cannot be considered as a necessary part of a consistent security concept of the banks and they impede non-bank competitors".

Erik Engellau-Nilsson from Swedish firm Klarna, one of the new breed of providers hoping to benefit from PSD2, welcomes the regulator's intervention: "This resolution represents a landmark moment for the European banking industry, and is the strongest indication yet that co-operation, not competition, is the future for banks and fintechs.

"The implementation of the EU Payment Services Directive (PSD2) will allow third party players to have direct access to the banking infrastructure and therefore offer a host of innovative products and applications to a bank’s customers. The banks that will thrive are the ones that embrace this opportunity for collaboration and innovation by willingly opening up their infrastructure. It will be very interesting to see what approach the banks will take to this - will they become Apple or Nokia?"

Paul McManus
Author

Paul McManus

UK Country Manager

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