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PSD2: EBA to set up API working group

The European Banking Authority (EBA) wants banks, credit card providers, fintechs and other businesses to work with it and national regulators to address technical issues that arise in the lead up to an important compliance deadline in the EU's payment services market.19 Dec 2018

A working group on Application Programming Interfaces (API) under PSD2, the EU's second Payment Services Directive, is to be set up by the EBA in early 2019. Businesses have until 14 January to express an interest in joining the group.

PSD2, which took effect earlier this year, provides new rights to account information service providers (AISPs) and payment initiation service providers (PISPs) to access payment accounts, like current accounts, and statement details, as well as other account information, held by banks and other ASPSPs where customers consent to such access.

The detailed requirements on third party access are contained in regulatory technical standards on ‘strong customer authentication and common and secure open standards of communication’. ASPSPs must either enable third party access to the data through the customer's normal online banking websites, or alternatively develop a new 'dedicated interface' (API) for that purpose.

A range of safeguards are outlined in the standards to ensure that the access rights of AISPs and PISPs are respected, including that ASPSPs provide a fallback option to ensure AISPs and PISPs can exercise their access rights where the normal interface they use is down or underperforming. However, ASPSPs do not have to provide a fallback if they benefit from an exemption.

While the standards were written into EU law in March, the majority of the provisions will not apply until 14 September 2019.

The EBA said its new working group, which it will chair, will consist of a mix of staff from the EBA, national authorities, EU institutions and from external stakeholders, and "will identify issues and challenges that market participants will face during the testing and use of ASPSPs’ production interfaces in the crucial period leading up to September 2019".

The EBA said it hopes to receive expressions of interest in joining the working group from ASPSPs, AISPs, PISPs, card-based payment instrument issuers, API initiatives and others, including consumer and business users of payment services, technical service providers and standardisation bodies.

In its paper, the EBA has outlined selection criteria which it said will inform how it chooses applicants for the working group.

Selected industry representatives in the working group will be asked to "propose, in a collaborative environment, solutions on how to the identified issues could addressed, which the EBA and national authorities will consider", it said.

The EBA said applicants can expect to hear whether or not they have been accepted as a participant by 4 February 2019. The first meeting of the group is scheduled for the third week in February next year, it said.