How PSD2 impacts platforms and marketplaces

Platforms and marketplaces have transformed commerce by making the link between buyers and sellers easier. These platform business models are continuing to grow in popularity and are spreading into more and more industry niches and use cases.

But as their importance increases, platform businesses have also brought accountability into question. Which party is legally responsible for the funds that are transferred from the buyer to the seller?

This is what the Revised Payment Services Directive (PSD2) clarifies and shifts more responsibility onto platforms.

PSD, introduced in 2007 by the EU, treated platforms as a gray area, which different countries interpreted in different ways. Platforms could be exempt from the regulation and seen more as a facilitator, or “commercial agent”, between the buyer and seller. Instead of being the party responsible for the purchase and sale.

Introduced in 2015, PSD2’s main aim was to create more security and a better experience for customers. In achieving this, the gray area for platforms was cleared up: platform businesses must have a payments license if they’re acting on behalf of both the buyer and seller.

When you play an intermediary role between a buyer (the payer) and a seller (the payee), and when the seller is located in the EU, you probably need a financial license.

An intermediary role, could mean you are either:

This financial license needs to be in the form of an e-money, PSP, or banking license, granted by an EU central bank.

Some exemptions might be available, such as the use of the commercial agent exemption. The commercial agent applies to platforms or marketplaces that are only acting on behalf of the payer or the payee. So unless you’ve structured your business around the commercial agent exemption, you’ll fall under the scope of the PSD2 license.

Fortunately, there’s another option besides getting a payments license. You can use the platform solution of an institution that’s already licensed and provides segregation between your own funds and the funds of your sellers.

Adyen offers a platform solution, called Adyen for Platforms, that lets you:

As a licensed financial institution, Adyen acts as the payment provider which processes funds between buyers and sellers. This means Adyen takes charge of onboarding your sellers, splitting the funds, and transferring the funds to the sellers’ bank accounts.

From a regulatory standpoint, Adyen keeps sellers’ funds on dedicated accounts separated from the platform’s own funds, ensuring that the platform is out of the money flow. Adyen also takes care of the steps required before settlement, including verifying sellers’ identity prior to settlement.

This takes the compliance aspects off you and means you can focus on growing your business.