HMT responds to its PSD2 consultation – Third Party Access

On 9 February 2017, the government published a consultation document, ‘Implementation of the revised EU Payment Services Directive II’, as well as draft legislation. The consultation invited responses on the government’s proposed approach to transposing PSD2 into UK law.

The government received over 85 formal responses to the consultation.

This response document summarises the content of these representations and sets out the government’s response, indicating where the final policy has been adjusted to take respondents’ views into account.

Implementation

  • The government has published the final legislation alongside this summary of responses and has today laid it in Parliament.
  • The FCA and PSR have recently finished consulting on the necessary changes they will need to make to their guidance to implement the PSD2, and will publish their final documents in Q3 this year.
  • Obligations relating to the EBA’s RTS on strong customer authentication and secure communication will come into force 18 months after it is published in the Official Journal of the European Union.

Third Party Access

  • Interestingly, HMT confirmed that prior to the RTS coming into effect, registered or authorised TPPs will be able to access consumers’ accounts directly by utilising their login details (commonly known as ‘screen-scraping’), or via Application Programming Interfaces (APIs) such as those designed to the Open Banking Standard. This is in line with the PSDII, which states that all registered or authorised TPPs must be able to access accounts.
  • The government can confirm that, in line with the text of the PSDII, TPPs operating before 12 January 2016 can continue to perform the same activities outside of regulation from 13 January 2018, but only until that point at which the RTS come into effect. It is important to note however that where a TPP continues to operate outside of regulation, it does not have a right of access. If TPPs wish to benefit from the right of access that the PSDII brings they will need to get registered or authorised with the FCA. All new TPPs or those established on or after 12 January 2016 will need to be registered or authorised to operate from 13 January 2018.
  • The Payment Services Regulations 2017 allow for applications from 13 October 2017, to enable firms to apply and be registered or authorised by 13 January 2018. The FCA has up to three months to determine an application, providing it is complete. It is in firms’ interests that applications are received as early as possible.