Brendan Jones (Konsentus): “The introduction of PSD2 open banking will lead to in effect a new push payment debit network being created across Europe.”

Brendan Jones


What are your predictions on 3 top challenges that will have the biggest impact on the Merchant Payment Ecosystem in 2019?

In the UK and some European markets direct push payments from banks using PSD2 open banking. For other markets such as the Netherlands where IDEAL is already strong PSD2 open banking will re-enforce this behaviour. Overall card schemes could see a drop of up to 30% in their volumes for online usage over the next few years.

The introduction of PSD2 open banking will lead to in effect a new push payment debit network being created across Europe. If you combine this with SEPA instant payments we are likely to see major move away from card based transaction, particularly in some currently strongly card based markets.

What will be the key drivers of B2C mobile payments in 2019?

PSD2 open banking again will have a major impact as the ability to push payments quickly through your mobile to the retailer effect the use of wallets and cards on mobiles.

PSD2 open banking will enable retailers to instantly check ‘affordability’ for in-store credit leading to a much smoother customer onboarding process and greater instore credit options from retailers.


Can you give us a view of what you are working on? What news would you like to launch in 2019?

Konsentus provides Third Party Provider identity and regulatatory checking for financial institutions enabling them to comply with PSD2 open banking. PSD2 open banking goes live for external testing on March 14 2019 and fully live September 14 2019. We have therefore now launched a full Sandbox and production environment for FIs and over the next year will be looking to support the 9,000+ FIs across Europe that offer a transactional account and therefore must comply to PSD2 open banking requirements.

Can you give us an update on what you’re currently working on in the area of merchant payments?

As we sit behind the FIs we in effect power the PISP payment providers as they go through the FIs. Every PISP payment can only be approved once the Third Party Provider has had their identity and regulatory status checked. We thus will be enabling millions of merchant payments.


We will see all of these start to have a major impact on the way consumers interact and how they combine e.g. a consumer gives a voice activated control through their wearable device to buy baked beans, the system knows the favourite brand, but also checks for offers and knows based on previous behaviour that if the offer is a good one they can substitute one brand for another without checking with the owner. The payment is initiated not using a card but through PSD2 open banking with a push payment to the merchant to pay for the goods.

How Open APIs are changing Merchant Payments and Services in Europe?

Open APIs and in particular the open banking APIs being rolled out as part of PSD2 will have a very significant impact on Merchant Payments. It has been forecast that up to 30% of current online card spend could move to PSD2 open banking PISP payments.


In 2019 the next stage of PSD2 new safety requirements such as Strong Customer Authentication, Risk Based Authentication impacting merchants and payment providers will come into effect. Could you share your perspective how this will impact commerce, customer experience and conversion rates?

This is one of the big elephants in the room as for the last few years we have heard a lot about one click shopping and frictionless checkouts. PSD2 now introduces new frictions, how retailer will adapt to handle this will be crucial. Even a ‘white listed’ merchant will need to be white listed the first time they are used by the consumer. This is likely to lead to additional basket drop off. Further as we see PISP payments start to increase this will be a new area that many of the fraud engines will need to start adapting to and ensuring that a merchant stays under the Risk Threshold not just on the usual card payments but also on these new forms. This could be challenging for many in the early days as these new payment methods start to grow.


What’s next for Card Acquiring, Scheme fees and Interchange Fee Regulation in Europe in 2019?

The next big thing for Card Acquiring will in effect be the new competition created by PSD2 open banking. This will in effect create a new non card based debit network allowing users to carry out debit card like transactions by pushing funds from their accounts. This would lead to an erosion of interchange fees for FI’s but aquirers that also act as PISP may just in effect replace one type of card based transaction with another.

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ECN Team
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