How can marketplaces become PSD2 compliant and simplify their international payments?

Loek Bosman – Product Manager at Acapture
With almost a decade of experience in online commerce, Loek combines his knowledge in business, technology and user experience to create valuable products and maximise the ROI. Having worked for multiple companies in Europe, China and Hong Kong, Loek is passionate about the user experience and he seeks to optimise consumer experiences. He works closely with his clients to maximise the customer’s experience and the client’s revenue. He analyses data and business intelligence and uses it for the evolution of the product roadmaps.

Why is PSD2 relevant for marketplaces? What other segments might be impacted by PSD2?

Through PSD2, the European Union opens up the market to new parties, lowers the influence of banks and adds new measures to protect citizens and their funds. In this sense, PSD2 basically implies that any intermediary party handling funds from both a seller and a buyer, when either or both of the parties are located in the EU, needs a payment institution license. This poses a great challenge for the affected organizations. Such intermediary party can be not only marketplaces but also online travel agencies, franchises and companies active in the sharing economy. All these operators fall under PSD2 and to become compliant, they must either obtain a payment institution license or find a licensed payment provider who can handle transactions on their behalf.

What costs are involved in acquiring a payment institution license?

Obtaining such a license is costly both in terms of time and resources, such as administrative procedures. To cut to the chase: it is a long, complex process, which in the end does not guarantee the success of obtaining the license. It requires hiring a team of specialists including Money Laundering, Compliance, and Risk Monitoring Officers, together with the creation of the merchant’s own Internal Audit and Underwriting Department. On top of that, the merchant’s Senior Management must pass a series of tests regarding counter-terrorist financing, sanction laws and other applicable legislation.

Everything starts with having all the policies in place, which usually takes around six months, and it requires the support of a dedicated law firm. Upon completing this preparation, merchants can begin the application process, usually taking another 6 to 12 months to finalize everything. In terms of the actual cost of obtaining the payment license, it could reach around EUR 200,000; however, even after investing so much time, effort and capital, merchants do not have the certainty that they will receive the license.

Does PSD2 make any exemptions?

Under the current Payment Services Directive, each country can decide on making certain exemptions for ‘small payment institutions’, classified as such by having an average monthly transaction volume limited to EUR 3 million. In contrast, under PSD2, countries offering this exemption are allowed to adjust the threshold at their own discretion.

What does that mean?

Basically, it means that if merchants qualify as a small payment institution as well, they may soon need to consider either revising their business model or applying to become an accredited payment institution to comply with the soon-to-be-introduced regulation. Also, it is worth noting that many regions, including the Netherlands, Germany and France, have opted not to incorporate this exemption at all.

How could marketplaces best deal with the PSD2 regulation?

The easiest and handiest way to take on the challenges posed by PSD2 is partnering with an experienced payment service provider already credited as a payment institution. The payment service provider will not only handle the funds from the merchant’s transactions but also ensure the merchant’s activity is not in any way disrupted to meet the PSD2 requirements. When developing SlicePay, we aimed to offer a flexible, cost-effective payment solution that makes PSD2 compliance feel easy, allowing merchants to concentrate on developing their business. Through SlicePay we take all of the above-mentioned issues out of merchants’ hands. As we’ll be handling the funds from the transactions, while merchants don’t have to change their existing operations in order to meet PSD2’s standards. This saves merchants considerable amount of time, money and effort.

Acapture recently introduced SlicePay, what does it solve for marketplaces and how can it be implemented?

SlicePay is a payment solution for simplified allocation of funds to multiple parties, designed to be BaFin and PSD2 compliant. It caters to the needs of marketplaces, companies active in the sharing economy and online travel. It is an easy-to-integrate product, that merchants can just plug it in their platform, without any upfront fees.

With one RESTful API, SlicePay reduces the burden of payouts to multiple parties in various countries and currencies. Through an automated payment system, the marketplace receives a single payment from the buyer, which SlicePay then splits between the sellers, in the right currency, at the right time and in compliance with all regulations. The seller can receive funds directly into their bank accounts, with no need for e-wallets. The solution doesn’t interfere with the merchant’s business model, offering a compliant solution and keeping the consumers’ funds safe and secure.

Moreover, marketplaces can use SlicePay to handle their seller’s transactions regardless of whether or not the seller is a client of Acapture, as the on-boarding and client management is all done on their side. By doing so, the full customer experience remains in the hands of the marketplace.

Not sure if your company will be affected by PSD2? Take the test and find out how you can prepare.

About Acapture

Acapture is the subsidiary company of Payvision, one of the world’s fastest-growing global card acquiring networks. Licensed as a payment institution by the Dutch Central Bank, Acapture combines with Payvision to maximize the revenues of merchants and help them grow their business globally. This is done through a complete data-driven omnichannel payment solution, capable of managing a payment at every stage, from checkout to fund collection to settlement.Together with its parent company, Payvision, Acapture, was awarded Best PSP at the 2017 MPE Awards in Berlin, and it specializes in maximizing revenue for merchants and marketplaces with international ambitions. Acapture’s system features SlicePay for simplified allocation of funds to multiple parties from a single transaction, data science management for improved authorization rates, a one-day integration using one RESTful API, flexible, consolidated reporting, a streamlined reconciliation process, global card acquiring and the ability to handle 80+ of the most popular alternative payment methods and 160+ transaction currencies.

Find out more on www.acapture.com and follow Acapture on Twitter @Acapture_Global, LinkedIn, Facebook, YouTube and Corporate blog. For further information, please contact: Alina Geosanu | PR & Communications Assistant; e-mail: alina@payvision.com