A new Act on Payment Services has entered into effect. In response, we have opened a sandbox that allows fintechs and other companies in the sector to develop fintech solutions that link to the Bank’s systems.
The new Act on Payment Services is based on a European directive dubbed PSD2. The Act entered into force 1 November 2021. Once the regulation accompanying the Act is fully implemented on 1 May 2022, entities other than banks will be able to offer private persons and companies main payment channels and bank account statements. In Iceland, such services have only been provided through online banking and bank apps. As of 1 May 2022, Landsbankinn’s customers can choose to view their bank accounts in apps and websites external to the Bank and use these services to make transfers from their accounts.
Customers can choose whether or not to utilise these services. Access to Landsbankinn’s customer data by fintechs and other companies is contingent on special approval by each customer. Access extends to so-called payment accounts that include unrestricted accounts used for such purposes as payments, transfers and withdrawals using payment cards.
Testing environment to develop solutions
To contribute to the possibility that such solutions could be ready for use this spring, we have, in accordance with the provisions of the Act, opened a sandbox, or development environment. There is no actual data on customers in a sandbox, it merely allows developers to test out certain of the Bank’s systems in a controlled environment. Fintechs and other companies or entities can use the sandbox to explore the functionality of various Bank systems. The sandbox allows developers to retrieve account information and transaction statements, test domestic and cross-border transfers, etc. Developers use this access to programme solutions that “talk” to the Bank’s systems.
The test environment is hosted and operated by Canadian fintech solution company Salt Edge, Landsbankinn’s partner in PSD2 solutions. Salt Edge is a leading provider of APIs for both banks and fintechs and developer of technology for financial markets around the world. Partnering with such a large and trusted entity opens various options for Landsbankinn’s customers as access to the international knowledge of numerous experts will help the Bank provide robust and agile services.
Strict requirements for service providers
The aim of the Act is to enhance competition and consumer protection in financial markets, as well as to support product development and innovation in the payment market. Only licensed entities within the European Economic Area (EEA and EFTA), such as fintechs, qualify as providers of the new payment service. These entities are required to have a special operating licence or be registered with local financial supervisory authorities and must comply with stringent requirements set forth in the new Act. To ensure equal treatment within Europe, actions and explanatory notes are in English. No access restrictions apply to the sandbox, which is simple and easy to use.
You’ll find a link to the test environment on developers.landsbankinn.is.
We look forward to seeing you in the sandbox!
