PSD2 opens doors for AP/AR professionals

During the last Exchange Summit in Barcelona (10-11 October), I gave a presentation on the current developments in payments and its implication for the AP/AR professionals, in particular, the implication of PSD and the provisions for Access to the Account’ (XS2A). In this short blog, we briefly share its significance.

Traditionally, the AP/AR sector isnt really part of the banking offering, while payments are very much part of the AP/AR business processes with clients. AP/AR players (companies like Basware, Comarch, OB10 and Ariba) therefore always seek for tight integration with the payment process. In practice, this implies interfacing (based on bilateral agreements with banks and service providers) with the plethora of banking software and ERP integration. Within corporates and SMEs, the payment process is typically handled outside of the AP/AR solution.

PSD2 and the provision for Access to the Account offer the opportunity for B2B players to achieve easier integration. XS2A has two main functionality categories:

1. Payment initiation. Third party applications (which fulfil the regulatory requirements; no additional contract with the bank needed) will be able to interface with a bank account after the customers consent. This means that AP/AR solutions can incorporate generic payment functionality with their solutions. This gives business users more options as with which software they use, beyond their banking software.

2. Account information. AP/AR application can now more easily have access to account information in a digital format. This complements the payment initiation functionality, as this can offer better cash visibility for corporates, in other applications than the banking software. Also, AP/AR solutions will have more data at their disposal allowing for improved and new data-driven services for e.g. risk management and cash prediction.

At the earliest, these functionalities become available at the end of 2018, making AP/AR players a full part of the fintech movement. Equally, similar opportunities also exist for commercial banks with an innovative mindset seeking to offer multi-banking (data) services. There is still some time for AP/AR professional to - likewise - make up their mind as to how to (re)act on this important development, but be careful, time flying really exists!

About Douwe Lycklama:

Douwe Lycklama is founding partner of Innopay. Douwe is one of the thought leaders in ‘networked services’ like e-payments, e-invoicing, e-identity, m-payments, cards and SEPA, shaping breakthrough business and market innovations, standards and schemes. Innopay works for major international financial institutions and corporates, developing products, businesses and strategies. Innopay is member of EPCA, EBA and ECP/EPN.

 About Innopay:

Innopay is an independent management consultancy firm specialised in digital strategy and transformation. For businesses it is a challenge to stay relevant in the increasing digital world. We help clients by providing strategies and solutions in the field of digital identity, online payments, ecommerce, digital innovation and e-business. Read more articles on the websites blog section.