Clear Books becomes an AISP ahead of upcoming PSD2 deadline

Clear Books becomes an AISP ahead of upcoming PSD2 deadline

The 14 September deadline for the EU Payments Service Directive's regulations is fast approaching, with more organisations ready to make the required changes.

Clear Books becomes an AISP ahead of upcoming PSD2 deadline

Accounting software provider Clear Books has registered with the Financial Conduct Authority (FCA) to provide Open Banking bank feeds for more than 12,000 small businesses, becoming PSD2 compliant.

By registering as an Account Information Services Provider (AISP), Clear Books now meets the regulatory requirements to continue providing service past the 14 September deadline. Customers should not experience a disruption in their services, only being required to reconfirm their details to continue service.

This change comes from the EU Payments Services Directive (PSD2), which aims to reduce fraud and make online payments more secure. Many of the PSD2 requirements became law back in January 2018, but the secure customer authentication (SCA) requirement hasn’t been required until September 2019.

Ruth Fouracre, chief executive officer at Clear Books, said: “Closer integration between financial institutions and accounting software providers promises quicker processes, more timely business information and confidence in the accuracy of tax returns for customers.”

Compared to the old system of screen scraping technology, Open Banking feeds are more secure, allowing information to be passed securely between banks and businesses’ financial software.

Fast-approaching deadline

The new banking requirements will affect both UK and EU bank feeds, requiring providers to use the more secure SCA-compliant Open Banking system.

As the 14 September deadline quickly approaches, companies like Xero, Barclays and Sage have become compliant, warning customers of the changes before they take place.

While these changes are implemented, some customers may experience a disruption in automatic service. Xero is warning customers that some direct bank feeds will be unaffected, while those who use Yodlee may be required to manually import bank statements until the changeover has been implemented.

However, not all companies are becoming compliant with the Open Banking system, particularly those with a primary base in North America. They can continue to provide services to customers, but users who connect a UK or EU bank institution—even if they themselves are in North America—will be unable to use the Open Banking system.

Additional changes

PSD2 will provide better integration into third-party networks, allowing non-banks to register as payment service providers (PSPs) to access consumer bank accounts to validate payments made online.

According to a PwC report, customers are embracing new technologies and making more online and mobile payments than ever. As such, the change to allow non-banks to register as PSPs may greatly benefit consumers who use mobile wallets such as Apple Pay.

The overall goal of PSD2 is to give consumers greater control over their finances, and for those finances to be managed more securely. Before the deadline, consumers are encouraged to check whether their financial software is PSD2-compliant, and to make arrangements if it is not.

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