Psd2 Banking
The phrase bank version of psd2 is a bit of a misnomer.
Psd2 banking. While this expansive regulation includes numerous updates the requirement for financial institutions to participate in an open banking system is arguably the most disruptive. Under psd2 an account information service ais is an online service that provides consolidated information to a user on one or more payment accounts held by that user with other payment service providers. The revised payment services directive psd2 directive eu 2015 2366 which replaced the payment services directive psd directive 2007 64 ec is an eu directive administered by the european commission directorate general internal market to regulate payment services and payment service providers throughout the european union eu and european economic area eea.
That means when you buy something they can make a payment for you without having to redirect you to another service like paypal or visa. The revised payment services directive 2 psd2 aims to better align payment regulation with the current state of the market and technology. The eu revised payment services directive or psd2 came into effect january 2018.
Almost all new regulations since 2008 have focused on tightening the banking business and operating model. Psd2 will break down the bank s monopoly on their user s data. It will allow merchants businesses like amazon to retrieve your account data from your bank with your permission.
The regulation s very creation came from the feeling that banks had far too great a monopoly on european consumers financial data. Open banking aka psd2 forces the biggest uk banks to open up their precious data which could mean big changes for the way we use money. With open banking third party providers tpps can offer customers a wealth of new and automated services beyond their standard bank offerings whilst initially seen as simply a regulation exercise the second payment service directive also known as psd2 has been a key driving force behind open.
What is psd2 psd2 regulations ensure that banks will create mechanisms to enable third party providers to work securely reliably and rapidly with the bank s services and data on behalf and with the consent of their customers.