Beyond PSD2: building flexible and secure payment journeys
After acquiring the AIS (Account Information Services) and PIS (Payment Initiation Services) licences from local regulator CSSF, Luxembourg-based LUXHUB has developed several innovative products that enable all companies, no matter the industry or sector they evolve in, to finally leverage Open Banking-powered solutions. What is commonly called ‘embedded finance’, with banking-like services available within ERPs, applications, websites, etc., now enables customers to benefit from robust, flexible, and consistent payment experiences, directly from the app they are using or the website they are browsing.
One of PSD2’s main ambitions was to enable the creation of a solid and efficient payment ecosystem in Europe, that would not rely anymore on giants located overseas. After completing their compliance part, TPPs (Third Party Providers) are now looking toward the future with more concrete applications and services available to their customers. They revolve around account information and payment initiation, as defined in the 2nd Payment Services Directive. These consist, for the payments part, of direct transactions, with no intermediaries and therefore lower fees, as well as a higher conversion rate. Moreover, the potential of such account-to-account payment (A2A) solutions will be soon increased by the European Commission’s intention to make offering instant credit transfers mandatory; payments are then settled and funds credited to the merchant’s bank account in a matter of seconds.
LUXHUB, as an Open Finance pioneer and connectivity/collaboration expert, is now enriching Open Banking payments initiation capability with new functionalities, to adapt it to specific use cases, making payments or collecting them. These additional features further extend the reach of PIS which will enable them to disclose their full potential.
Request-to-Pay: a messaging functionality
The first key point to discuss is the fact that RTP is no payment method: it can be defined as messaging functionality, with a merchant/payee directly requesting payment from a payer, linking to a specific purchase and with all relevant details directly entered during the request creation. This also means that payers enjoy a flexible and secure way of settling a specific payment, with no possible error as no manual task is needed, except for the final validation and processing of the payment.