Who is impacted by PSD2?

Banks, payment institutions, fintech platforms, merchants, and TPPs offering financial services within the EU and EEA.

What is Strong Customer Authentication (SCA)?

It is a security requirement using two or more factors (e.g., password, phone, biometrics) to verify customer identity.

How does PSD2 support open banking?

It obligates banks to share customer account data with licensed third parties when customers give consent.

Is PSD2 still valid after Brexit?

The UK implemented PSD2 in 2018, but it now follows its own regulatory path post-Brexit via the UK Payment Services Regulations.

PSD2 Payment Services Directive

European Union

2015

Payments

Overview

The Revised Payment Services Directive (PSD2), enacted in 2015, is a key piece of EU legislation regulating electronic payment services and enhancing consumer protection. It promotes innovation, competition, and security in the banking, fintech, e-commerce, and payments sectors.

PSD2 mandates banks to open customer payment account data to licensed third-party providers (TPPs) through APIs, enabling services like account aggregation and payment initiation. It also introduces Strong Customer Authentication (SCA) and fraud prevention measures to protect digital payments across the European Economic Area (EEA).

Key Obligations

Banks must provide regulated third parties access to customer payment accounts via APIs
TPPs must be licensed and authorized under national competent authorities
Strong Customer Authentication (SCA) is mandatory for most electronic transactions

Consumers must be protected against unauthorized transactions with clear liability rules
All payment service providers must report major security incidents and fraud metrics

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