PSD 2: shaking up payments | KPMG | LU

PSD 2: shaking up payments

PSD 2: shaking up payments

The new EU Payment Service Directive 2 (“PSD 2”) comes into effect on 13 January 2018.

The new EU Payment Service Directive 2 (“PSD 2”) comes into effect on 13 January 2018.

The new EU Payment Service Directive 2 (“PSD 2”) comes into effect on 13 January 2018. The revised version of the directive is the result of a fundamental review of Payment Service Directive 1 (“PSD 1”) and replaces, updates and expands it in key areas.

The driver of the PDS 1 revision was, besides wanting to increase competition and innovation in European payment transfers, aiming to further improve consumer protection and the security of payment processes. This means that the scope of PSD 2 has been extended and now also affects so-called third-party payment service providers (i.e., non-banks).

Besides new rules for liability and for technical means of customer authentication, a key feature of PSD 2—which makes it worrying for banks and their traditional business models—is the account access (XS2A) for third-party service providers provision.

For banks, XS2A represents a significant turning-point as to what, and primarily how, their services can be offered to customers.

PSD 2 is a chance for banks to reinvent themselves, diversify their products and service offerings, and continue to be recognised for adding value for their customers.

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