What is PSD2?
PSD2 is the second Payment Services Directive adopted by the European Union which has followed on from the original Payment Services Directive (PSD) established in 2007.
PSD was established as a way to encourage safe, more innovative payment services throughout the European Union (EU) and European Economic area (EEA).
The Payment Services Directive was revised in October 2015 (PSD2) with new rules to better protect customers when they pay online, promoting development of online and mobile payments through methods such as open banking and therefore making cross border European payments safer.
The regulation was given two years to incorporate this directive into national law in November 2015.
PSD2 came into force in January 2018 and was focused on building on the original legislation through;
- Enhanced security through SCA (strong customer authentication) criteria.
- Increased customer rights such as new rules on currency conversion and surcharging
- Providing a new payment frame work to enable the access of third parties to account information.
An important part of the PSD2 is the Strong Customer Authentication and this important deadline comes into effect from the 14th September 2019.
What is SCA?
Strong customer authentication (SCA) is now a European requirement making payment authentication more secure. SCA means that two or more separate elements of authentication need to be used in order to verify the transaction.
These can be:
- A password or PIN (personal identification number)
- A user possession such as a smart card or a mobile phone.
- Something that the user is (a biometric feature) such as a retinal scan and finger prints.
SCA can be implemented in multiple ways by the card user including 3D secure2 such as a Mastercard identity check.
Any card after 14th September 2019 not meeting the requirements of the PSD2 could get declined.
Resova customers and PSD2
As a customer of Resova you will not need to take any action as all payment gateways must be compliant with the new rules from September. Any Resova utilised payment gateways and European supported payment gateways will automatically be upgraded by September 2019 in order to meet the new PSD2 regulation.