More competitive EU payments market: setting the pace for the future of online transactions, PSD2 embraces the evolution of virtual financial services by applying these new regulations in equal form to traditional banks and new players in the industry – namely FinTechs – which are now regulated under EU rules. In case something goes wrong, complaints are to be handled by competent authorities designated by each Member State Not only that, but PSD2 prohibits additional charges for payments with consumer debit or credit cards, both in shops and online. More consumer rights: consumer liability when it comes to unauthorised payments is reduced, with the addition of a “no questions asked” refund policy for direct debits in euro. This empowers customers to take charge of their finances and make informed decisions regarding their present and future It was also designed to give consumers a myriad of new services that help them better manage their assets in this new era of financial literacy Īccess to custom tailored products: individuals can have access to relevant products and services, allowing for greater personalization and the benefit of choice. More control over your financial data: the introduction of this new regulation allows for easier access to relevant data and a more integrated way of controlling things like spending and savings. As a result, consumers should feel increasingly more confident when buying online Safer online transactions: PSD2 ensures that electronic payments are mediated by strong security requirements, such as Strong Customer Authentication ( SCA), protecting consumers’ financial data and privacy. What are PSD2’s main benefits for consumers? On the other hand, QWACs (Qualified Website Certificates) are used for website authentication to ensure the identities of Account Servicing Payment Service Providers (ASPSPs) and third party providers (TPPs). The QSEAL (Qualified Electronic Seal) certificates are used for identification verification purposes in order to protect transaction information. The payment service providers rely on qualified certificates for electronic seals that can be obtained from a Qualified Trusted Service Provider. What is the importance of QSEAL and QWAC on PSD2? These regulated providers can then use APIs to offer an array of payment and information services, that can range from financial management apps to software developed for helping e-commerce with direct PSD2 payments. Under this new payment services directive, banks, and other financial institutions are required to provide APIs (Application Programming Interfaces) for regulated and licenced external services providers, commonly referred to as third-party providers. How does PSD2 work?Įach Member State of the European Union can individually adopt PSD2 regulations, and have them implemented under their own laws. Businesses impacted by Covid-19 restrictions had their compliance deadlines extended to September 14th 2021. The Revised Payment Services Directive was first introduced in 2015, but in order to allow for a transition period the transposition deadline in the EU and EEA (European Economic Area) was set to January 13th 2018.ĭue to some technical difficulties, banks, merchants, and other Fintech institutions were granted an extension for full implementation of PSD2 until the end of 2020. The Revised Payment Services Directive has three main benefits: increased consumer rights, improved security and permission for regulated third-parties to access payment account information. With this came more competitiveness, easier and quicker payments as well as tailored solutions that are able to cater to every particular need. PSD2 is also seen as an additional step towards a digital single market in the EU, giving consumers better choices when it comes to financial services by allowing new players to gain access to the market. This directive works as an additional layer of protection for individuals and businesses that do online transactions. PSD2 is a piece of EU (European Union) legislation that is intended to modernize banking, making it not only safer but also more transparent. What is the Revised Payment Services Directive (PSD2)?
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