PSD2 stipulates exemptions to the Secure Customer Authentication (SCA) requirement for merchants in cases of: Trusted beneficiaries: merchants that are whitelisted by consumers. Recurring transactions: regular payments to the same business, like subscriptions. Low-value transactions of less than €30.
What is the aim of PSD2?
The key objectives of the PSD2 directive are creating a more integrated European payments market, making payments more secure and protecting consumers.
What is PSD2 regulation and what is the impact?
PSD2 is the EU's attempt to both encourage innovation and protect customers in a single regulatory effort. More specifically, the two major areas that PSD2 will impact are customer authentication and third-party access to consumer accounts.
What is a major concern about PSD2?
The most common PSD2 challenges According to Tink's report, modernizing IT systems is one of the major banking challenges for 36% of banks when it comes to PSD2. But, one of the major concerns is that online businesses may end up with complexity as every bank can offer different implementation.
What is PSD2 in simple terms?
PSD2 stands for Payment Services Directive 2. It's an EU directive designed to produce safer and more innovative payments services. Customer rights The PSD2 regulation improves customer rights in several different ways. Firstly, it mandates greater transparency around terms and conditions and currency conversion.
What does PSD2 mean for banks?
Payment Services Directive 2
What is the purpose of PSD2?
PSD2 focuses on enhancing consumer protection and experience through modernization of the payments market and competition within the European payments industry. At a high level, it has three main goals: improve consumer rights, strengthen eCommerce security, and manage third-party access of consumer financial accounts.
Does PSD2 apply to banks?
PSD2 opens the EU payment market to competition: PSD2 sets the stage for the future. With online financial services constantly evolving, the new rules will apply equally to traditional banks and to innovative payment services and new providers, such as FinTechs.
Why is PSD2 important?
The PSD2 brings two major changes to the payments industry: It mandates stronger security requirements for online transactions through multi-factor authentication (MFA) and it forces banks and other financial institutions to give third-party payment services providers access to consumer bank accounts if account holders
What is in scope of PSD2?
All transactions including those with 'one leg out' (at least one party is located within the EU, and no longer both) are in the scope of PSD2, and all official currencies (cryptocurrencies are excluded). It will offer a better information to customers and a better protection of the European part of the transaction.