Find out how to comply with new EU regulation PSD2 by integrating the NOMO API
If you’re a marketplace or platform that handles third party payments then you may or may not have heard about PSD2. You may have even tried to read the numerous reports and whitepapers out there which try to explain it in ‘simple terms’. Here’s a simple summary which gets straight to the point.
The European Union has designed a second Payment Services Directive which aims to transform the payment industry. It will come into play beginning of 2018 and focuses on enhancing security on payments and supporting innovative banking methods.
The new regulation addresses a number of different areas within the payment landscape however the most important aspect relating to marketplaces is the way the law will view their business.
A marketplace is acting as an agent between the buyer and the seller. They often also facilitate the payment between the two parties; accepting the funds from the buyer and then distributing them to the seller. As the marketplace is handling funds that do not belong to them, once PSD2 comes in to play they will be viewed as an intermediary of payments. This means they need to hold a licence which can cost more than €200,000 and take up to 18 months to be granted.
If you’re a marketplace your business focus is most likely to try and grow your customer base and increase sales. Not payments. The mountain you would have to climb to become a financial institution whilst trying to grow simultaneously is daunting and rightly so. There is another way…
Partnering with a licensed payments business can not only save you money on operational costs, but also allow you to comply with PSD2. By using a safeguarded escrow account to hold the client funds, your buyers are protected. The NOMO API provides such a service whilst also allowing you to customise the payout process to suit the needs of your business. You can hold the funds on the escrow for as long as you like and even create a free transaction network on your platform if you wanted to.
NOMO is PSP agnostic which means there’s no need to change your existing provider and you can be up and running in no time.
For more information contact a member of the team today by filling in our contact form.