Register of payment and electronic money institutions under PSD2 (2024)

FAQs

What is a payment service under PSD2? ›

PSD2 establishes a framework for new services linked to consumer payment accounts, such as the so-called payment initiation services and account information services. In this context, the RTS specify the requirements for common and secure standards of communication between banks and FinTech companies.

Under PSD2, an AISP must: Have an AISP licence in their home country, and get passporting rights to operate in other European host countries. Provide services only based on the customer's explicit consent.

PSD2 prohibits surcharging, which is additional charges for payments with consumer credit or debit cards, both in shops or online.

PSD2 has been designed to increase competition by creating a level playing field for both banks and non-banks. It removes the monopoly banks have on the use of customer data, allowing other businesses to use that data as well, with the customer's permission.

The Revised Payment Services Directive does not apply in the United States, being enforced exclusively in Europe.

PSD2 gave open banking a stable regulatory framework. It imposed an obligation on banks to facilitate access to payments data for AISPs and PISPs via a secure interface.

Which Regions/Entities Require PSD2 Compliance? PSD2 applies directly to payment services providers, including banking institutions and payment processors operating in the European Economic Area (EEA). However, the regulation may have a far-reaching application, including organizations outside the EU.

The EBA Revised Guidelines on major incident reporting under PSD2, define an operational or security incident as, “a singular event or a series of linked events unplanned by the payment service provider which has or will likely have an adverse impact on the integrity, availability, confidentiality, and/or authenticity ...

However, PSD2 empowers the European Banking Authority (EBA) to develop a number of guidelines and technical standards, including a mandate (under Article 98) to deliver regulatory technical standards (RTS) on strong customer authentication and secure communication, implementation of which will run to a different ...

What is a mandated use case of PSD2? ›

PSD2 specifies that consumers have the right to use any third-party provider for their online banking services. As a result, banks are mandated to provide open Application Programming Interfaces or APIs to allow software at one company to access payment account information and payment initiation from another.

Who is subject to PSD2? PSD2 affects all member countries of the EU as well as those within the European Economic Area and anyone wishing to engage in the European payments market.

The most common definition is it's an account that can send and receive payments to and from a third party. But it's not always that simple. To qualify as a ”payment account” under PSD2, an account needs to meet three criteria: You can place funds in the account. You can withdraw cash from the account.

The PSD 2 gives payers the right to use third-party payment service providers and obligates the account servicing payment service provider to provide the third-party payment service provider with a (dedicated) interface that can be used to initiate transfers ( e.g. to online retailers), download account information, or ...

Put simply, Payment Services Directive Two (PSD2) is a piece of legislation designed to force providers of payment services to improve customer authentication processes and to also bring in new regulation around third-party involvement.

What are Payment Service Providers (PSPs)? PSPs (also called Merchant Service Providers) are third-party companies that help business owners accept a wide range of online payment methods, like online banking, credit cards, debit cards, e-wallets, cash cards, and more.

Payment service includes credit card payments; payments into, and withdrawals from, ATM machines or over the counter; direct debits, including one-off direct debits; transferring e-money; payment transactions executed through a payment card or a similar device; credit transfers, including standing orders, BACS and ...

Square, Stripe, Shopify Payments, Amazon Pay and PayPal are all examples of payment service providers. Also known as third-party payment processors, PSPs allow businesses to accept credit and debit cards, plus other payment types for online, mobile, in-store and recurring payments.

A Payment Settlement Entity (PSE) is an organization that facilitates payments between parties for payment cards or third party payment networks.