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Published on 20/01/2025
The Web Banking Revolution | Instant transfers and PSD2 at the heart of change
The European banking system is going through a period of unprecedented transformation, marked by major developments at both regulatory and operational levels. The arrival of the PDS21 and the rise of instant transfers are redefining the rules of the game in the payments sector. For e-retailers, these changes represent both adaptation challenges and development opportunities. The modernisation of banking infrastructure and the emergence of new payment services are paving the way for innovations that are set to revolutionise online transactions.
PSD2 | A regulatory framework that revolutionises payments
PSD2 (Payment Service Directive 2) has radically transformed the payments landscape in Europe since its entry into force on 13 January 2018. This European regulation brings major changes to four key areas:
- Priority given to strong customer authentication: PSD2 requires double verification for every online transaction. In practical terms, this involves verifying at least two factors that include something customers know (a password), something they have (a telephone) and something they are (biometrics). This measure aims to minimise the risks of fraud in a context where the number of instant payments is increasing.
- Innovation by opening up to third parties: the directive now allows new non-banking players to access bank accounts via secure APIs2 (with customer consent). This development promotes the emergence of new financial services and stimulates competition in the sector.
- Enhanced transaction security that relies on strict protocols: banking establishments must update their systems to guarantee secure data exchanges, which are particularly important for instant transfers that require the rigorous verification of IBANs.
- Regulation to control charges, particularly for cross-border payments in the European Union: the ACPR (French Prudential Supervision Authority) ensures the harmonisation of these measures, which benefit both consumers and professionals alike by providing increased transparency on the costs of payment services.
This regulatory revolution paves the way for major innovations in the payments sector, as demonstrated by the remarkable growth of instant transfers in Europe.
The rise of instant transfers in Europe
Instant transfers are gradually becoming a credible alternative to payment by bank card in Europe. France currently accounts for only 6% of transfers3, but this payment solution is gaining ground when it comes to online transactions. Major brands, such as Leroy Merlin, have already adopted it. Between 2022 and 2023, the number of instant transfers almost doubled!
There is also the recent arrival of Wero, the first European digital wallet launched in September 2024. Developed under the European Payments Initiative (EPI), it offers innovative payment services, such as 10-second fund transfers via phone or QR code, and plans to extend its features to online and in-store payments by 2025-2026, with the support of 16 major European banking groups.
Northern Europe is leading the way with some success. In Sweden, the electronic payment solution Swish has won over 8 million users out of a population of 10 million!4 This shows the widespread adoption of instant digital payments. Belgium is not far behind with Payconiq, a system based on QR codes, which is quickly expanding in online and in-store purchases.
Instant transfers have many advantages for merchants. In a difficult economic context, they offer an alternative to charges linked to card payment methods. They also represent a particularly interesting solution for brick-and-mortar stores where margins are tighter than for pure e-commerce retailers.
Another major advantage of instant transfers is that there are no limits, unlike with bank cards. It is therefore an efficient payment solution for high-value transactions, as it allows merchants to push through sales that may have been capped by traditional bank cards. A great opportunity to increase your turnover online or in store.
Faced with this payments revolution that has both technological and regulatory implications, online banking platforms must rethink their fundamentals. Web banking must also reinvent itself.
The impact on tomorrow’s web banking
The future of web banking is taking shape around a major transformation of payment systems. Faced with the rise of instant transfers and new regulations, online banking platforms must evolve to adapt to the challenges of tomorrow. User verification is now key: any natural or legal person wishing to make an instant transfer will have to undergo strong authentication.
For e-retailers, these changes open up new horizons. Integrating these payment systems allows them to enrich their customer service offer with more flexible solutions. Payment in instalments solutions5 are expanding to offer consumers a broader range of financing options to pay for their purchases, while guaranteeing increased security for merchants.
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