Site Navigation

What is the Payment Service Directive 2 (PSD2)?

Pay - ment Ser - vice Di - rec - tive 2 (PSD2)
noun

Payment Service Directive 2 (PSD2) is a set of regulations established by the European Union to enhance and improve online payment processes. PSD2 encourages banks to share specific information (with the cardholder's consent) to enable the development of innovative payment services. This initiative aims to make online shopping more seamless and secure while promoting the creation of improved payment solutions by banks. In essence, PSD2 expands payment options and enhances the overall payment experience for consumers.

How does the Payment Service Directive 2 (PSD2) work?

PSD2, or Payment Service Directive 2, introduces a significant shift in online payments. It opens the door to new participants in the payment landscape, known as third-party providers. With the cardholder's consent, these providers can access consumer's bank account to facilitate payments, expanding the shopper's online payment options beyond credit cards. Moreover, PSD2 enhances security by implementing measures to verify a shopper'sidentity during online transactions. Ultimately, it's about offering today's consumer greater flexibility, ensuring the safety of payments, and enhancing convenience in the online payment experience.