PSD2 (Payment Services Directive 2)

PSD2, or the Second Payment Services Directive, is a regulatory framework enacted by the European Commission to oversee and regulate payment services and payment service providers within the European Union (EU) and the European Economic Area (EEA). This directive, which builds upon the foundations laid by the first Payment Services Directive (PSD), was implemented to enhance consumer protection, increase the security and efficiency of payments, and foster innovation and competition within the payments industry.

Key provisions of PSD2 include:

Passed in 2018, PSD2 not only aims to harmonize the regulatory framework across the EU and EEA but also promotes transparency and efficiency in the payments market. By opening the market to new players (non-banking entities) and enhancing security measures, PSD2 benefits all stakeholders by providing more choices and improved services, ultimately contributing to a more dynamic and secure financial ecosystem in Europe.