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The Payment Services Directive II and Competitiveness: The Perspective of European Fintech Companies

Author

Listed:
  • Inna Romanova
  • Simon Grima
  • Jonathan Spiteri
  • Marina Kudinska

Abstract

Changing regulation and business environment as well as development of information technologies in finance is rapidly modifying the financial services industry. This consequently puts the financial services industry under additional pressure and constant growing competition from the financial sector participants, from large technology companies such as Google, Apple, Facebook, Amazon, from large FinTech companies such as PayPal, Moven, TransferWise, mobile network operators and other existing and potential market players. The implementation of the new EU Payment Service Directive (PSD2), which allows non-financial companies to provide access to financial services for bank customers, is expected to disrupt the financial services industry as we know it, and make traditional financial services providers and banks, in particular, think of new creative business models to remain competitive. In the process of doing this, changing the landscape of payments and creating new risks for banking business.With this study we aim to assess the new EU Payment Service regulation in the context of industry competitiveness. The study is based on the examination of the PSD2 Directive exploring the opportunities as well as the risks that it will bring to this industry in the near future, and the possibilities of cooperation of the financial services industry with financial technology developers. Moreover, we analyse structured data, collected from a questionnaire based on 4 themes of perception of techs on the importance they have on ensuring competitiveness, conducted with European tech companies.Most of the questionnaire participants believe that the Payment Services Directive 2 will promote competitiveness, innovations and development. Moreover, findings show that comparativeness is related mainly to low costs and customer satisfaction. However, it is also shown that high quality of products/services as well as relatively high speed of transactions and security, privacy and risk are also perceived as important.

Suggested Citation

  • Inna Romanova & Simon Grima & Jonathan Spiteri & Marina Kudinska, 2018. "The Payment Services Directive II and Competitiveness: The Perspective of European Fintech Companies," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 3-22.
    • Handle: RePEc:ers:journl:v:xxi:y:2018:i:2:p:3-22
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    Citations

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    Cited by:

    1. Xinyu Cai & Marko Milojevic & Denis Syromyatnikov & Anastasia Kurilova & Beata Ślusarczyk, 2021. "Mathematical Interpretation of Global Competition between Payment Systems," Mathematics, MDPI, vol. 9(17), pages 1-18, August.
    2. Preziuso, Massimo & Koefer, Franziska & Ehrenhard, Michel, 2023. "Open banking and inclusive finance in the European Union: Perspectives from the Dutch stakeholder ecosystem," EIF Working Paper Series 2023/94, European Investment Fund (EIF).
    3. Onorato, Grazia & Pampurini, Francesca & Quaranta, Anna Grazia, 2024. "Lending activity efficiency. A comparison between fintech firms and the banking sector," Research in International Business and Finance, Elsevier, vol. 68(C).
    4. Mansurali Anifa & Swamynathan Ramakrishnan & Shanmugan Joghee & Sajal Kabiraj & Malini Mittal Bishnoi, 2022. "Fintech Innovations in the Financial Service Industry," JRFM, MDPI, vol. 15(7), pages 1-19, June.
    5. Pradeep Dwivedi & Jawaher Ibrahim Alabdooli & Rajeev Dwivedi, 2021. "Role of FinTech Adoption for Competitiveness and Performance of the Bank: A Study of Banking Industry in UAE," International Journal of Global Business and Competitiveness, Springer, vol. 16(2), pages 130-138, December.
    6. Inna Romanova & Simon Grima & Jonathan Spiteri & Rebecca Dalli Gonzi, 2019. "A Study of Alternative and FinTech Payment Solutions for Airlines," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 9(3-4), pages 132-149.
    7. Massimo Preziuso & Franziska Koefer & Michel Ehrenhard, 2023. "Open banking and inclusive finance in the European Union: perspectives from the Dutch stakeholder ecosystem," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-27, December.
    8. Albulena SHALA & Rezearta PERRI, 2022. "Regulatory barriers for fintech companies in Central and Eastern Europe," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 13, pages 292-316, December.
    9. Payam Hanafizadeh & Mojdeh Gerami Amin, 2023. "The transformative potential of banking service domains with the emergence of FinTechs," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(3), pages 411-447, September.
    10. Daniel Broby, 2021. "Financial technology and the future of banking," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-19, December.

    More about this item

    Keywords

    Banks; Financial Services Industry; FinTech; Innovations; PSD2; Risks JEL code: G21; G29;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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