Ivan Velkov for Economy magazine: BORICA has a number of initiatives related to PSD2
PSD2: Are We Ready for Open Banking
Ivan Velkov, Director “Product and service development” at BORICA speaks with Economy magazine
Directive (EU) 2015/2366 of the European Parliament on payment services (Payment Service Directive or PSD2) requires bank institutions to meet the new security requirements, to have an open access to their systems through their Application Programming Interface (API) over the Internet, and to adapt to the new competitive environment of open banking.
It allows new players to enter the financial services market, giving way to the Bulgarian environment of independent payment service providers (PSP) certified by the Bulgarian National Bank to provide end-clients with access to the electronic payment instruments of the banks. The ultimate goal is for clients to have reliable and secure tools to better manage their money.
“The directive puts pressure on banks to become even better, and thus, not only to retain their existing clients but also to attract new ones,” comments Ivan Velkov, Director “Product and service development” at BORICA.
“Banks are already preparing for open banking. They need to open their systems to the new providers, but they can also act as PSPs and provide payment and information services to clients from other banks, which opens new opportunities for them,” Velkov says.
In connection with the requirements of PSD2 and the related amendments to the Payment Services and Payment Systems Act (PSPSA), BORICA AD has undertaken a number of initiatives to assist banks in the fulfilment of their obligations as payment service providers servicing an account.
THE BISTRA STANDARD
As a first step in this direction, a PSD2 working group was formed with the assistance of the Association of Banks in Bulgaria (ABB), which was joined by specialists from BORICA AD and representatives of the banking community. As a result of the common efforts, the National Technical Standard, called BISTRA (Bank Interfaces for STandardised PAyments), was created.
It defines the means and methods for interaction of the participants in the payment process, according to the PSPSA (PSD2). It is based on the widely adopted NextGenPSD2 XS2A Framework platform developed by the Berlin Group, reflecting the specifics of the financial system in Bulgaria. The first version of BISTRA is already completed and accessible, and it is expected that the work on the maintenance, development and improvement of the standard will continue. The plan is to update the versions every 6 months or so.
ACCESS TO ACCOUNT GATEWAY
The next step is the development of the Access to Account Gateway service (or XS2A Gateway). It will be based on the BISTRA National Technical Standard and will meet the requirements of the PSPSA and PSD2. Its scope includes:
- Publication of interfaces (APIs), according to BISTRA
- Main functionalities - account information service (AIS), payment initiation services (PIS) and confirmation of available funds (PIIS, CBPII)
- Checking in relevant registers and validating PSP Administrative Portal for Monitoring and Reporting
- Developer portal, including documentation and sandbox.
The Access to Account Gateway service will be based on a world-renowned platform provider. It is being designed by using state-of-the-art technical devices that allow for flexible adaptation and connection to banks’ existing applications and systems. The plan is to provide a secure and protected environment with a high level of accessibility, based on the already built network and communication infrastructure, 24x7 monitoring and maintenance, 24x7 banking service centre. As additional services, BORICA AD will offer consent management, help desk for developers (TPP), as well as an opportunity to expand strong customer authentication (SCA) with a Cloud Qualified Electronic Signature offered by BORICA AD or another Certification Services Provider.
“Following the statutory deadlines, we are planning to provide a test environment of the service to our clients by the beginning of 2019, and from the beginning of March 2019, we will start a portal and test environment for developers,” Ivan Velkov shares.
Simultaneously with the access gateway, BORICA AD will update the traditional Infobank service that provides the clients with account statements in different banks, and will offer it to the market in the context of PSD2, together with an expanded set of services tailored to the interest and policy of the shareholders (banks operating in Bulgaria).
BORICA AD is not the only one on the market offering services, related to PSD2. “Our advantage is in the long-standing relationships with the banking community in Bulgaria and the understanding of the specifics and the needs of the market,” Ivan Velkov says.
BORICA AD informed the banks about its initiatives in the field of PSD2 and a large part of them declared their intentions to entrust the company and use its services. By the end of the year, XS2A Gateway will be ready for testing by banks and payment service providers. By September 2019, everyone who wants to use this technology solution will have the possibility to integrate it.
“There is much more work to be done, but new opportunities for improving payment methods are surfacing. The Directive will also open the door for instant payments,” Mr Velkov believes.
PSD2 – KEY FACTS
- 2007 - The Payment Services Directive (PSD - Directive 2007/64 / EU) was adopted
- 2013 - The European Commission proposes the revised version PSD2 - EU Directive 2015/2366
- January 2016 - the revised version PSD2 was adopted
- 6th March 2018 - with amendments to the Payment Services and Payment Systems Act (PSPSA), PSD2 was transposed into Bulgarian legislation
- 13th March 2018 - Directly related to PSD2 regulatory technical standards (RTS) were published
- 14th March 2019 - As of this date, Account Servicing Payment Service Providers (ASPSP) must provide access to the documentation of their APIs and sandboxes
- 14th September 2019 - PSD2 Regulatory Technical Standards become mandatory.
Source: Economy magazine