1) Regulation. What you heard as "PSD2" - is essentially a directive by European Commission and EBA demanding banks to open up access to accounts data and payment initiation. Neither it defines by what means this access should be provided, nor when it should be available - each European country Central Bank can decide on its own.

2) Technical Specification. Examples are OpenBanking UK specification or The Berlin Group - would be groups of banks or local regulators trying to define common standards. Think of interface definition that describes both APIs as well as journeys/workflows.

3) Compliance. In the EU some of the banks (mostly large ones) are now required to be PSD2 compliant, which means they would need to expose their APIs through the standards described above. In the US, where there is no such requirement - the only way to access the bank account is to emulate a browser.

4) Third-Party Providers or Aggregators (Plaid, Teller, Tink, SaltEdge, Bud...) - would essentially provide access to the accounts of multiple banks via APIs. If you look at Plaid in the US - their codebase is probably 50%+ screenscraping/user emulation scripts in order to retrieve your accounts from e.g. Bank of America. For the EU fin-techs its a bit better, but still depends per country (remember Berlin Group vs UK OpenBanking?).

Why 'would be' just out of interest?

AFAICT Open Banking is an organisation that has been given a mandate by the UK government, through the competition and marketing authority, and is funded by the nine largest retail banks. In the UK it is the defacto standard, and compliance of the CMA 9 is mandatory.

While there is so far no consistent standard across the EU, at least within the UK this one is set and pretty much non-negotiable.

(Disclaimer - I have consulted with Open Banking and continue to do so, but of course I do not speak on their behalf)

-- edit --

I'm particularly interested in this -

> Third-Party Providers or Aggregators (Plaid, Teller, Tink, SaltEdge, Bud...) - would essentially provide access to the accounts of multiple banks via APIs.

As AFAICT this would be explicitly disallowed unless all the users of said APIs are themselves accredited. You can't just get accredited for PSD2/OB API use, then expose that information to non-accredited entities. If this is what Plaid are doing then I wouldn't expect their accreditation to last all that long.

The scenario is typically the following. After the EU Commission approves the directive, each country has to transform it into the national law and define the authority/approach/timelines. In the case of the UK, it's indeed the way you've described.

> As AFAICT this would be explicitly disallowed unless all the users of said APIs are themselves accredited.

In UK Plaid would have to follow the OpenBanking regulation indeed and provide access according to the consent of the account owner. In the US they are just storing your password and using it according to their privacy policy.

I'm sure they've looked into this with their lawyers, but acting as an escape route for banking data to non-approved entities is not likely to be smiled upon.

Firstly, the consumer must be aware that they are sharing their data via Plaid (i.e. Plaid can't hide behind the scenes).

Secondly, there are certain exceptions for needing to be regulated by the FCA - particularly if you don't show any data back to the user.

In practice, it makes sense to be regulated by the FCA regardless because asking to share bank information/transactions with Plaid can turn users off and you're limited with what you can do with that data without being regulated/authorised.

Source: Fintech founder in the UK/Ireland.

(Source, I consult with OB and have a hand in their PKI, I don't speak for them and I'm not part of or informed well about anything to do with the regulatory environment)

PSD2 deadline is set to September 2019: http://europa.eu/rapid/press-release_MEMO-17-4961_en.htm

Not entirely correct. In the US, JPMorganChase, Intuit, and others have adopted the OFX standard (consortium-based, which provides #2) as a more secure, controlled API alternative to browser emulation.

[1] https://github.com/plaid/link/issues/68

They are PSD2 compliant which means they're using the Open Banking API I linked to in my other comment.

I think plaid is the lesser evil when compared to rolling all of that on your own for N different banking institutions.

The nine largest banks and building societies are required to participate. Many others do so voluntarily.

I'm guessing plaid uses oauth & open banking when available, and falls back to scraping when it's not.

But if instead the question is "what's the alternative" the answer is "government intervention" as shown by the UK.

Not so true under Open Banking and other systems. Open Banking uses OAUTH2 style stuff, and a variety of certificate schemes (Open Banking's own, and EU ETSI qualified certificates) to allow participants to be delegated various forms of access and roles, in a much more granular way.

>> As a commenter on the issue says, there is no oauth-esque mechanism implemented by banks.

There is in the UK, and PSD2 solutions are rolling out all across the EU. Australia is also getting in on the action.

The typography on the docs page is excellent: https://plaid.com/docs/quickstart/

https://en.m.wikipedia.org/wiki/T._P._O%27Connor

In that case, the objective was to argue for home rule for Ireland. And to look out for the large Irish community in Liverpool.

Joking aside, I also read the title as referring to Plaid Cymru and was very confused.

https://en.wikipedia.org/wiki/Mercia

http://www.tartansauthority.com/highland-dress/modern/flypla...

"Plad" [ie tartan-y cloth] is USA pronounciation to me; which I assume is what you mean in your second sentence?

"Played" of course also means "to be conned".

"Plaid" in "Plaid Cymru" is pronounced like "plied" in English.

Is Plaid Cymru pronounced 'Pllad' ;)

note: I'm aware some of the challenger banks here (Starling etc) have a developer API, but that's their own offering

https://openbanking.atlassian.net/wiki/spaces/DZ/pages/16320...

The biggest UK banks have a legal obligation to participate and many smaller ones are participating as well.

I can see why a third party API gateway would still be useful internationally though.

;)

And also what the biggest pain points are to building fintechs in other markets.

I.E. The APIs available in the UK are designed to open data up to competition, but only within the limits of those orgs that are FCA accredited for PSD2 Roles of various sorts. Are you allowed to let others piggyback on those?

EU is an easy target.

Pretty happy with Truelayer (https://truelayer.com) but more competition is always better.

These APIs use an authorisation flow similar to what you see when you 'Login with Google' or 'Login with Facebook'. At some point in that flow, you are redirected to your bank's web site to allow access, and to select the account(s) for which you are allowing access. At this point, you are on your bank's web site, you can check the URL to make sure you're not being phished.

On the face of it, it seems like any company that's building on top of bank transaction data should just register as an AISP themselves, as the integration with Open Banking APIs doesn't look that complicated. But Plaid is one of a number of third parties that insert themselves in between.

In general these services suggest some combination of (i) easier integration, i.e. less development and maintenance, (ii) additional intelligence on top of the raw data, e.g. categorisation of transactions, (iii) no need for maintenance.

There's one obvious con: the AISP's logo has to be shown in the authorisation flow. So, even if your users know you, they might not be willing to share their information with 'Plaid' or whichever third party AISP you've chosen.

I don't know how real the development/maintenance/integration issues are. I could imagine that registering with 30+ banks and testing your code against all of them might be a hassle. But if their API backends all behave in the same way, then maybe you just need configuration parameters for the endpoint and token(s). If their backends have slightly different behaviour, though, then perhaps you need to branch your code based on the bank.

One thing that's encouraging about Plaid entering this space: their free tier appears to support up to 100 bank accounts for free. This should be enough for anyone who wants to set up their own self-hosted Mint equivalent. And, if all the accounts are in the UK, then you're giving Plaid just read-only access to your accounts, which is much less of an issue than providing your login credentials to them or another party.

In case you're curious to see which other companies have registered as AISPs or PSPs (payment service providers), the full list of third party providers is available here: https://www.openbanking.org.uk/provider-categories/third-par...

In the UK this is no longer necessary and FCA accredited organisations (Or qualified organisations from across the EU) can gain access to Bank APIS which allow much easier, programmatic access with much more granular access and far fewer security implications.

IIRC teller have also been subject to blocking and possible lawsuits from various banks for their scraping activities and are not well liked in the industry.

(--edit-- I am rate limited here so cannot respond below, just to say that if OB APIs are not performant, that'll likely be down to the participating banks. I would expect them to improve over time.

I'm not trying to say teller is illegal - I doubt very much that it would have survived this long if it were illegal - simply that the security model is not so great and the banks don't like it and continue to try to block it. 'Stevie' would probably do well to get himself accredited before the banks find a way to keep him out permanently.)

>In the UK this is no longer necessary and FCA accredited organisations (Or qualified organisations from across the EU) can gain access to Bank APIs which allow much easier, programmatic access with much more granular access and far fewer security implications.

I don't have a horse in this race, but in my experience the Open Banking APIs are:

* Not performant

* Poor at handling and reporting errors

* Limited in their functionality

The Open Banking website lists 34 banks that currently support it.