We have had some discussion in the recent past about the safety of account aggegator like Personal Capital, Yodlee, etc. and payment systems used by FB & Google.
My non-technical layman explanation is that today our accounts are accessed by everyone with the password we create. Consequently, many of us are rightfully insecure about using some of the tools stated above.
In the PSD2 world, there will be a 'read only' password that will be shared. So when Yodlee downloads your accounts or you make a Google Pay purchase, they will use another 'read only' password connected to your account but not able to access it. Another layer of protection.
This is info from the link: "In short, PSD2 enables bank customers, both consumers and businesses, to use third-party providers to manage their finances. In the near future, you may be using Facebook or Google to pay your bills, making P2P transfers and analyse your spending, while still having your money safely placed in your current bank account. Banks, however, are obligated to provide these third-party providers access to their customers’ accounts through open APIs (application program interface). This will enable third-parties to build financial services on top of banks’ data and infrastructure.
Banks will no longer only be competing against banks, but everyone offering financial services. PSD2 will fundamentally change the payments value chain, what business models are profitable, and customer expectations. Through the directive, the European Commission aims to improve innovation, reinforce consumer protection and improve the security of internet payments and account access within the EU and EEA. "
In some ways this is like the pin & chip launch in Europe, leading the USA in a better approach. I wanted to put the PSD2 out there to inform people that there might be a safer approach that would be helpful to many of us. But, we may have to ask for it to accelerate its USA adoption
BTW, if there are people out there that can provide a better explanation than I provided, you will not hurt meyfeelings if you share. I know enough to be dangerous.
https://www.evry.com/en/news/articles/psd2-the-directive-that-will-change-banking-as-we-know-it/
My non-technical layman explanation is that today our accounts are accessed by everyone with the password we create. Consequently, many of us are rightfully insecure about using some of the tools stated above.
In the PSD2 world, there will be a 'read only' password that will be shared. So when Yodlee downloads your accounts or you make a Google Pay purchase, they will use another 'read only' password connected to your account but not able to access it. Another layer of protection.
This is info from the link: "In short, PSD2 enables bank customers, both consumers and businesses, to use third-party providers to manage their finances. In the near future, you may be using Facebook or Google to pay your bills, making P2P transfers and analyse your spending, while still having your money safely placed in your current bank account. Banks, however, are obligated to provide these third-party providers access to their customers’ accounts through open APIs (application program interface). This will enable third-parties to build financial services on top of banks’ data and infrastructure.
Banks will no longer only be competing against banks, but everyone offering financial services. PSD2 will fundamentally change the payments value chain, what business models are profitable, and customer expectations. Through the directive, the European Commission aims to improve innovation, reinforce consumer protection and improve the security of internet payments and account access within the EU and EEA. "
In some ways this is like the pin & chip launch in Europe, leading the USA in a better approach. I wanted to put the PSD2 out there to inform people that there might be a safer approach that would be helpful to many of us. But, we may have to ask for it to accelerate its USA adoption
BTW, if there are people out there that can provide a better explanation than I provided, you will not hurt meyfeelings if you share. I know enough to be dangerous.
https://www.evry.com/en/news/articles/psd2-the-directive-that-will-change-banking-as-we-know-it/
