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Open APIs and Open Banking: Assessing the Impact on the European Payments Industry and Seizing the Opportunities

European banks are at a critical juncture, with changes in the payment industry requiring major strategic decisions. They need to decide whether to become a banking service utility, supporting other providers in their customer-facing solutions, or play a central role in the daily lives of consumers. In this context, the regulatory requirements to open up payment accounts via application programming interfaces (APIs) play a major role, since they are expected to help drive the industry towards a new ecosystem shaped by the wider concepts of “Open Banking.”

The aim of this article is to try to explain the main aspects of this expected industry evolution and describe the impact and key strategic challenges and opportunities this will entail for banks in their role as “account-servicing payment service providers” (AS-PSPs), in particular.