Maltese payment and e-money institutions and the Payment Services Directive 2

Abstract

Purpose: This study was first motivated by the fact that no previous studies have been done by University of Malta students on local Payment and E-Money Institutions. The Payment Services Directive 2 (PSD2) was regarded as being a directive that will heavily impact this sector. Therefore, as a primary objective, this study should analyse the impact of PSD2 on the local Payment and E-Money Institution sector. Furthermore, an assessment on the local Payment and E-Money Institutions was conducted in order to discover their level of preparation for PSD2. Finally, this study also attempts to discover the opportunities and threats presented by PSD2 to the Maltese players. Design: A qualitative approach through the use of semi-structured interviews was considered to be the most appropriate for satisfying the research objectives. As a result, the findings of this study represent the views of five Payment Institutions, two E-Money Institutions, two industry experts, two regulators and three banks on the subject matter. Findings: Results show that PSD2 will have a very big impact on the local Payment and E-Money Institutions. However, it was noted that this sector is very well informed about PSD2 changes but limitedly prepared. Furthermore, several arguments against the regulators were mentioned in view of lack of preparation. Both primary and secondary data have shown that PSD2 will offer a wide range of opportunities for a vast amount of players such as IT companies, Banks and also Payment and E-Money Institutions. However, a number of threats were also outlined as some might suffer from loss of business as a result of PSD2. Conclusions: In the view of lack of preparedness for PSD2 changes, more effort needs to be done from the regulators by issuing guidelines and information sessions to the local players in the payment market on how they should prepare for PSD2. Value: This is the first study on local Payment and E-Money Institutions which should give an insight of how this rapidly growing sector operates. Furthermore, the findings of this dissertation demonstrate how local companies can take advantage of the opportunities presented by PSD2.