Enabling payment initiation services in e-commerce

Abstract

The revised Payment Services Directive (PSD2) set ambitious goals to introduce payment initiation services (PIS) as a viable online alternative to card payments. Through studies and consultations, this paper reviews the market uptake of PIS. It then explores the online payments ecosystem to identify gaps in the PIS ecosystem that the card schemes address to help maintain their dominance in the online payments ecosystem. While exploring these gaps, this paper seeks to assess whether the Proposal for a Regulation of the European Parliament and of the Council on payment services in the internal market (PSR) will meaningfully increase the uptake of PIS in e-commerce relative to card payments. Where the PSR falls short, the paper identifies opportunities within complementary frameworks to drive stakeholder engagement and promote broader adoption of payments powered by PIS. This article is also included in the Business & Management Collection which can be accessed at http:// hstalks/business.