The PSD2 Directive for marketplaces

directive DSP2

PSD2 Directive and marketplaces : obstacle or opportunity?

Le 15 January 2021

For marketplaces, the PSD2 Directive clarifies a legal vagueness. But is causing a number of upheavals in their business models, and their roles in collecting funds on behalf of third parties. Basically, if it is to comply with the new regulatory obligations of the directive, a marketplace is, and must remain above all, a sales window for merchants.

Marketplaces : towards a role of payment institution?

Since the entry into force of the second Directive on payment services (EU2015 / 2366, known as PSD2 Directive), the legal vagueness around marketplaces has been clarified: when they collect funds on behalf of merchants before redistributing them cut off from a commission, marketplaces are considered, de facto, as regulated payment service providers (apart from rare exemptions, under restrictive conditions).

For merchants, this new readable legal environment guarantees them greater security in their dealings with market places. However, the latter are primarily intended to focus on their core business: the consolidation of multiple offers (from various merchants) and their marketing to target customers in the area of catchment area they cover.

However, apart from a few large players able to support a real role of payment institution, the majority of marketplaces will have to find other alternatives, such as the status (also regulated) of payment institution agent. Both to comply with the obligations of the PSD2 Directive and to strengthen their attractiveness to merchants (with services similar to larger marketplaces), and therefore their profitability.

Secure and accelerate the onboarding of merchants

For the interests of the marketplace as well as those of the merchants, the principle is simple: the sooner the offers are put online, the sooner everyone starts making money. Except that, as providers of regulated payment services, marketplaces must, before entering into contracts with each of their merchants, carry out a number of checks.

And in particular to ensure the reality and the veracity of the identity of the co-contractor, according to the Know-Your-Customer principle, which aims to prevent identity theft, tax evasion, money laundering and the financing of terrorism. However, it is now impossible to contract without this step, at the risk, for the marketplace, of being caught up by the monetary and financial authorities.

Once again, however, this supervisory role is particularly far from their core business. Besides an obvious risk of error, it is also a question of optimizing time and shortening onboarding deadlines that arises. Being able to rely on a third party capable of meeting regulatory requirements for them while limiting risks and delays is a valuable asset for the vast majority of marketplaces.

Optimized accounting rules and methodologies

Generalist, sectoral, targeted at certain customer segments : marketplaces are multiplying, giving merchants more and more choice of those that suit them best. Because of the catchment area covered, of course, but also, and increasingly, of the commercial relationships, organization and services offered. In particular, regarding the terms of payment after sales.

However, the single monthly payment, hitherto commonly accepted, is clearly no longer possible, in favor of real-time accounting: now payments must be made after each transaction, and the commission clearly identified. In addition to healthy cash flow for the merchant, this method offers them better visibility, and increased organizational capacity (for restocking or even logistics, for example). Not to mention greater transparency and real confidence in the marketplace.

In this context, the centralization of operations and the automation of the associated processes (payment to merchants, provision of accounting information, lettering, etc.) are among the vectors for the success of the marketplace, and the loyalty of its merchants. A system that it is of course possible to develop internally, provided that it is able to change it according to the recurring regulatory changes in the payment services market.

Article originally published on February 26, 2020 and read in full on