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Explained: Payment Service Directive 2 (PSD2)

Explained: Payment Service Directive 2 (PSD2)Payment Service Directive 2 (PSD2) is the implementation of a European guideline designed to further harmonize money transfers inside the EU. The ultimate goal of this directive is to simplify payments across borders so that it’s as easy as transferring money within the same country. Since the EU was set …

  • 13 Mar 2019
6 min read
Explained: Payment Service Directive 2 (PSD2)
Payment Service Directive 2 (PSD2) is the implementation of a European guideline designed to further harmonize money transfers inside the EU. The ultimate goal of this directive is to simplify payments across borders so that it’s as easy as transferring money within the same country. Since the EU was set up to diminish the borders between its member states, this make sense. The implementation offers a legal framework for all payments made within the EU. After the introduction of PSD in 2009, and with the Single Euro Payments Area (SEPA) migration completed, the EU introduced PSD2 on January 13, 2018. However, this new harmonizing plan came with a catch— the use of new online payment and account information services provided by third parties, such as financial institutions, who needed to be able to access the bank accounts of EU users. While they first need to obtain users’ consent to do so, we all know consent is not always freely given or with a full understanding of the implications. Still, it must be noted: Nothing will change if you don’t give your consent, and you are not obliged to do so. Which providers Before these institutions are allowed to ask for consent, they have to be authorized and registered under PSD2. The PSD2 already sets out information requirements for the application as payment institution and for the registration as account information services provider (AISP). The European Banking Authority (EBA) published guidelines on the information to be provided by applicants intending to obtain authorization as payment and electronic money institutions, as well as to register as an AISP. From the pages of the Dutch National Bank (De Nederlandsche Bank): “In this register are also (foreign) Account information service providers based upon the European Passport. These Account information service providers are supervised by the home supervisor. Account information service providers from other countries of the European Economic Area (EEA) could issue Account information services based upon the European Passport through an Agent in the Netherlands. DNB registers these agents of foreign Account information service providers without obligation to register. The registration of these agents are an extra service to the public. However the possibility may exist that the registration of incoming agents differs from the registration of the home supervisor.” So, an AISP can obtain a European Passport to conduct its services across the entire EU, while only being obligated to register in its country of origin. And even though the European Union is supposed to be equal across the board, the reality is, in some countries, it’s easier to worm yourself into a comfortable position than in others. Access to bank account = more services Wait a minute. What exactly does all of this mean? Third parties often live under a separate set of rules and are not always subject to the same scrutiny. (Case in point: AISPs can move to register in “easier” countries and get away with much more.) So while that offers an AISP better flexibility to provide smooth transfer services,
Source: Malware BytesPublished on 2019-03-13
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  • 13 Mar 2019

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