Compliance with PSD2

Compliance with PSD2 (the Second Payment Services Directive) requirements means that an Electronic Money Institution (EMI) adheres to the rules and regulations set forth by the European Union for payment services. PSD2 is a directive that applies to the countries within the European Economic Area (EEA), and its primary goals are to:

1. Increase Competition: PSD2 opens the payment market to non-banks and fosters innovation by allowing third-party payment service providers (PSPs) access to bank infrastructure, given customer consent.
2. Enhance Consumer Protection: The directive includes strict security requirements for the initiation and processing of electronic payments and the protection of consumers’ financial data.
3. Improve Security: PSD2 introduces Strong Customer Authentication (SCA), which requires electronic payments to go through a multi-factor authentication process to increase transaction security.
4. Promote the Development of Innovative Online and Mobile Payments: The directive encourages the development of new online and mobile payment services, providing consumers with more options and convenience.
5. Establish a Level Playing Field for Payment Service Providers: By standardizing regulations across the EEA, PSD2 allows various providers to compete fairly, with clear rules on how to operate.
6. Ensure Transparency: The directive mandates clear communication regarding fees, payment conditions, and the rights and obligations of both payment service providers and users.

When an EMI platform is compliant with PSD2, it means that it has implemented the necessary legal, operational, and technical standards to meet these objectives. For customers, it means they are engaging with a platform that provides secure, transparent, and reliable payment services that conform to current regulatory expectations within the EEA.