PSD2 (Payment Services Directive 2)
What is PSD2 (Payment Services Directive 2)?
PSD2 is an EU regulation that updated the original Payment Services Directive to account for new digital payment services. It introduced requirements for Strong Customer Authentication and mandated that banks provide access to customer data for authorized third parties.
Why It Matters
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It makes online payments more secure through multi-factor authentication requirements.
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It fosters innovation by allowing fintechs to build services on top of bank data.
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It lowers the cost of payments by encouraging competition and new payment methods.
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It provides a clearer legal framework for emerging payment service providers.
