Eat or Be Eaten: Token Empowers Banks in Complying with PSD2
Cointelegraph spoke to Marten Nelson from Token about the company’s first step in leading European banks towards secure API banking.
Silicon Valley’s Token takes the first step in leading European banks towards secure API banking with an opening of the office in London.
The fintech world is buzzing about PSD2. With the deadline for its implementation approaching, European banks have started to realize the magnitude of the proposed changes in regulations and try to decide upon a strategy which would allow them to react to these changes accordingly.
What all the fuss is about?
PSD2 sets out to standardize, integrate and improve the efficiency of payments within the European Union, offering consumers better protection and service through innovation and cost savings. It also aims at facilitating a competition in the payments market, which would eventually mean more options for customers. But at what price this objective is to be achieved?
The directive forces banks to provide account information to third parties through application programming interfaces (APIs) which cut out transaction intermediaries. And it has significant implications for banks. Sharing their customer’s data with anyone who holds a required license brings new opportunities for existing players, and significantly simplifies the entry to the banking and payments scene for new service providers.
The question for banks now is whether to eat or to be eaten. Silicon Valley Token might have the solution for banks.
Bringing control tools back to banks
Token’s platform was officially launched at the EBAday event in Milan in June.
As presented by CEO Steve Kirsch:
“Token was designed to meet the needs of payments in the digital age; it is a simple, powerful, extensible and secure transaction network which enables banks to establish PSD2 compliance virtually overnight.”
Cointelegraph spoke with Marten Nelson, VP Marketing and Business Development, to know more about developed solution.
Powered by smart tokenization and public-key cryptography, Token provides the industry's simplest and most secure open API which enables money transfer capabilities and access to bank account information as determined by the PSD2 regulation, while keeping the banks in control and allowing them to generate new revenue.
The Token solution is delivered as software and is a snap to integrate with the bank's infrastructure. In addition to regulatory compliance, banks benefit from increased revenue, significantly better security and the avoidance disintermediation.
Improving customer experiences
While helping banks to seize the opportunities offered by PSD2 and create a win situation for the business, Token opens doors to better customer experience.
Nelson explains to Cointelegraph:
“Customers gain easy control of their banking information and are safeguarded against breaches. Further, with the Token payment network, online purchases are easier and more secure than ever to complete.”
Expansion into Europe
Following the launch of the platform earlier in August, Token announced an expansion into Europe with an opening of the office in London. The recent decision by the UK to leave the EU family has raised some concerns over the future of fintech industry in the country and its regulatory alignment. A number of fintech companies started considering moving their businesses to other EU member states. However, Token still favors London.
Nelson says to Cointelegraph:
“The Brexit conditions have yet to be negotiated and it's still too early to know how that affects UK banks and the need to comply with PSD2 in the UK market. Further, PSD2 brings one-leg transaction within scope, which would affect UK payment providers. UK banks who also operate in jurisdictions where PSD2 come into effect on January 2018 will need to comply with PSD2.”
As Nelson explains, the opening of the London office is in direct response to local market demand:
“London is a global financial center and many of the UK banks also operate in jurisdictions which must comply with PSD2 by January 2018.”
The new office will be serving UK banks by delivering an open, secure API solution which would allow them to mitigate risk and disintermediation and provide a path to monetization. The general mission would be to lead banks to a secure API economy.
The opening of the London office is only the first step. Token is expecting to increase its presence in the UK and eventually expand throughout Europe. The Token crew believes that PSD2 will be the catalyst for API banking to spread around the world and fuel new and exciting business models. Banks, consumers and businesses will all benefit from this banking revolution.