Regulatory hurdles, alongside data and technology discrepancies, are hindering the roll out of Open Banking, the chief executive of ConnectPay has said.

ConnectPay is an online banking service provider for internet-based companies, covering SEPA and SWIFT payments, IBAN multi-currency accounts, Merchant accounts, corporate cards, and BaaS.

The company said that while Open Banking and the use of APIs has led to the development of new financial products and services, instead of enabling financial service providers to streamline the launch of new solutions to support merchants, “regulatory inconsistencies” throughout the market are posing new challenges for companies that are trying to innovate.

According to Marius Galdikas the company has experienced this first-hand during the roll out of its API product.

“Each state interprets PSD2 regulatory policies differently, resulting in subtle nuances that need to be taken into account on a country-by-country basis, which leads to a plethora of differences and effectively limits smooth rollout,” said the chief executive. “Also, our Merchant API Is powered by Payment Initiation (PIS) and Account Information services (AIS.)”

Galdikas added: “In many cases, PIS and AIS cannot work without the other, however, they are regarded as two different licenses with separate regulatory nuances, adding to the challenges.

"It is inconsistencies like this and the absence of a clear, unified approach towards what payer data hinders further progress and the presence of a truly open financial service ecosystem.”

He claimed that while API availability in Europe has greatly improved this year, innovation has slowed down because “European regulation is outdated with respect to modern APIs.”

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