PSD2 (Revised Payment Services Directive)
PSD2 — Directive (EU) 2015/2366 — is the EU law that opened bank payment accounts to licensed third parties (open banking), mandated strong customer authentication (SCA) for electronic payments, and created the licensing framework for payment institutions.
What it introduced
Two regulated open-banking services: AIS (account information — read-only aggregation of balances and transactions) and PIS (payment initiation — triggering a payment from the customer’s account). Banks must expose APIs to licensed third-party providers, which created Europe’s account-to-account payment and open-banking data industries.
SCA — two-factor authentication for most electronic payments — was PSD2’s other big change, reshaping checkout flows and card fraud rates across the EU. The directive also standardized licensing for payment and e-money institutions, the category under which much of European fintech operates.
What comes next
The Commission’s PSD3/PSR package is updating the framework — open-finance expansion, stronger IBAN-name verification (verification of payee), and refined SCA exemptions — converging with MiCA and the digital euro into a single European payment architecture.
Related Standards
- •Directive (EU) 2015/2366 (PSD2)
- •RTS on Strong Customer Authentication (Regulation (EU) 2018/389)
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