EC unveils revised Payments Service Directive for secure online payments


2017-11-28 12:03:00

BBR Staff Writer
Published 28 November 2017

European Commission (EC) has introduced revised Payments Service Directive (PSD2), as part of its efforts to provide higher security standards for online payments.

The Regulatory Technical Standards (RTS) will allow to provide customers with safer and advanced electronic payments.

The revised PSD2, which will be effective in January 2018, will help to extend advanced payment services and enter new providers such as FinTechs into the market.

It will allow third party payment services providers (TPPs) such as payment initiation services providers (PISPs) and aggregators and account information service providers (AISPs) into the market.

The PSD2 enables the commission to adopt regulatory technical standards (RTS) on the basis of the draft submitted by the European Banking Authority (EBA).

The security measures placed in the RTS are based on two key objectives of PSD2, including consumer protection and increasing competition and level playing field in a changing market environment.

EC’s PSD2 will provide better protection for consumers when they make electronic payments or transactions. The strong customer authentication (SCA) will serve as basis for accessing one’s payment account.

The PSD2 is said to establish a framework for new services associated to consumer payment accounts such as payment initiation services and account information services.

All communication interfaces will be subject to a three-month prototype test and three-month live test in market conditions, according to RTS.

Under both PSD2 and the Data Protection Directive, the account holders can exercise control over the transmission of their personal data.

PSD2 will prohibit TPPs from accessing any other data from the customer payment account beyond those explicitly authorised by the customer.

Payment market players need to upgrade their payments security systems during the transition period between the application date of PSD2 and the application date of the RTS (18 months after publication of the delegated act in the Official Journal of the EU).

New payment initiation service providers and account information service providers require to secure the relevant authorisation to enter the market during the transition period.

Image: EC’s revised Payments Service Directive will provide consumers with secure online payments. Photo: courtesy of Stuart Miles /

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