PSD2 (Payment Services Directive 2)

(Payment Services Directive 2 "PSD2" is an international term).

PSD2 is an EU directive that is reshaping payments. It promotes innovation, competition and security in the financial industry by opening up access to banking data and services to third-party providers.

PSD2

The Second Payment Services Directive (PSD2) is a landmark EU regulation that aims to fundamentally modernize payments and financial services. This directive, introduced in January 2018, has the potential to permanently change the financial sector in Europe.

PSD2 relies on two central pillars: First, it opens up access to bank customers' account data and payment functions to third-party providers, including fintech companies, provided that customers give their consent. This enables third-party providers to develop innovative financial services, such as account information services or payment initiation services.

Second, PSD2 tightens security standards for electronic payments. The introduction of Strong Customer Authentication (SCA) ensures that customers need additional authentication for electronic payments to prevent fraud and increase security.

PSD2 helps promote competition by opening up the market for financial services and attracting innovative players. It improves the user experience for consumers, encourages the development of new services, and contributes to the overall modernization of payments.

PSD2 examples

A financial startup is developing a user-friendly app that allows users to manage their account information from different banks in one place and use financial management tools.

An e-commerce company implements a secure payment solution like Payrexx that meets SCA requirements and protects customers during online transactions.

A fintech company offers customers personalized savings suggestions based on analysis of their account data and financial habits.

PSD2 FAQ

  • The aim of PSD2 (Second Payment Services Directive) is to modernize European payments. It aims to increase competition, innovation and security by granting third-party providers access to bank accounts and introducing strict security standards.

  • For payment service providers like Payrexx, PSD2 means adapting to new regulations and stronger security mechanisms. Open APIs enable access to account data and new services.

  • Consumers benefit from more choice, privacy and security. They can use innovative financial services and Strong Customer Authentication (SCA) increases the security of online payments.

  • SCA requires two-factor authentication for electronic payments, using two of three factors (knowledge, possession, identification), such as password and fingerprint.

  • Open APIs give third-party providers access to account data and payment functions. They foster innovation and new financial services that can change the way financial management is done.