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Landsbankinn Introduces New A2A Payment Solution

Landsbankinn is the first Icelandic bank to offer access to an “account-to-account” (A2A) payment solution, which enables fintech companies to install software solutions (apps) enabling the Bank's customers to pay directly from their accounts. This means the Bank's customers will be able, for example, to use an app from the company in question to transfer Icelandic krónur (ISK) from a bank account with Landsbankinn to bank accounts with foreign banks, A2A, without using other solutions offered by the Bank, such as a Landsbankinn app, online banking or a payment card.

With this, Landsbankinn has taken an important step towards what is called an “open banking system”. Open banking technology is based on application programming interfaces or APIs.

Lilja Björk Einarsdóttir, CEO of Landsbankinn: “Landsbankinn's policy is to lead the way in open banking in Iceland, and this solution shows it in action. The purpose of an open banking system is to increase competition in financial services and promote product development and innovation. Landsbankinn is fully involved in this development and we see many opportunities for our customers and for the Bank. By launching the A2A payment solution and inviting companies to connect to the Landsbankinn API marketplace, we are creating a business platform for companies to offer our customers new ways to take advantage of Landsbankinn's services and at the same time take part in shaping the future of banking services. Even though the EU Payment Service Directive (PSD2) has not been transposed into law in this country, we want to take this step now and thus help our customers benefit as soon as possible from the changes occurring in financial services."

Landsbankinn's API Marketplace was opened in February 2019. Access to the marketplace consists, on the one hand, of the test environment (sandbox) and, on the other hand, a live environment. Once an individual or company has tested its product in the sandbox environment and is ready to progress, it applies for access to the live environment. To gain access to the live environment for API payment solutions, companies must meet certain security demands set by the Bank, for instance, on their financial eligibility, the security aspects of their software solution, and reputation risk. The solution is intended for companies intending to act as payment initiators, as prescribed in PSD2. It should be noted that companies do not have access to customer payment accounts without the customer’s express prior consent.

Landsbankinn has also issued API solutions providing data on exchange rates, interest rates and prices.  These solutions are available to anyone interested in utilising them in their technical solutions via Landsbankinn’s API marketplace.  More solutions will be forthcoming.

PSD2 and open banking

An article on Landsbankinn’s information portal Umræðan discusses the EU Payment Services Directive, PSD2, which came into force in EU Member States at the beginning of 2018. It stipulates that banks should provide companies and other parties wishing to provide financial services with access to payment accounts in an open banking system.

Landsbankinn's API Marketplace