Banking

Question 1

What does PSD1 and PSD2 stand for?

Answer 1

Payment Service Derective

Question 2

What are the key differences between PSD1 and PSD2?

Answer 2

PSD2 creates two new payment services:

1) Regulated banks in the UK are now required to let customers share their transaction data such as spending habits and regular payments with authorised third-party providersAlso known as Open Banking.
2) Payment Initiation Service Provider (PISP) gives new actors the possibility to initiate payments on behalf of the payer. Instead of initiating payment from their bank, the user can initiate payment via the PISP, which in turn transmits the instruction to the bank.

Question 3

When was PSD1 introduced?

Answer 3

2009

Question 4

When was PSD2 introduced?

Answer 4

January 2018

Question 5

What three things has PSD1 created since its introduction in 2009?

Answer 5

1) Payment Initiation Service Provider (PISP) and the regulatory format that allows new non-bank companies to carry out financial transactions.
2) Banks are required to be transparent about their services and fees, including maximum payment execution times, fees and exchange rates.
3) Accelerated the development of SEPA as a “single euro payment area” to facilitate the execution of payments.

Question 6

What are the two groups of services are enabled by Open Banking (PSD2)?

Answer 6

Account Information Service (AIS) - Serve information related to accounts, balances, transactions etc.

Payment Initiation Service (PIS) - Initiates digital payments on behalf of the user.

Question 7

Who funds Open Banking in the UK?

Answer 7

The Competition and Markets Authority (CMA) government department.

Question 8

Define the kinds of tactics deployed in a Macroeconomic strategy?

Answer 8

Using interest rates, taxes and government spending to regulate an economy’s growth and stability. This focuses on the performance and structure of the economy as a whole rather than jincentivising certain aspects of the economy, as with a Microeconomic startegy.

Question 9

Why was the UK the first country in the world to achieve an Open Banking MVP?

Answer 9

The single API for Open Banking is standardised in the UK&I, enabling 90% market coverage. PSD2 is the European regulation and began with offering flexibility to AIS and PIS service providers in how to structure their API’s. This is now being rethought.

Question 10

What % of payments did cash make up in 2018 and what % is it expected to be by 2028

Answer 10

2018 –> 26%

2028 –> 9%

Question 11

What country is expected to become the first cashless society?

Answer 11

Sweden by 2023