PSD2
Electronic payments have become increasingly common and are now a standard way to complete transactions. A new section of the European directive known as “PSD2” entered into force on 14 September 2019.
What is PSD2?
PSD2 is short for “Payment Services Directive 2”.
It follows on from PSD1 in 2009, which created a modern and coherent legal framework for payment services within the European Union.
Aimed at making electronic payments more secure, PSD2 establishes new rules to promote innovation and competition within the payment sector and to ensure that consumers are provided with a high level of protection when they use payment services anywhere in the European Union.
What are the changes introduced by PSD2?
PSD2 opens up the payment market to new actors (providers of account information and payment initiation services).
These actors are regulated and must be registered with a supervisory authority in a European Union member state.
The directive fosters the emergence of new services to meet the needs of modern users and encourages daily use of new technologies. Examples of new services include the aggregation of bank accounts held at one or more banks, budgeting tools, payment initiation, etc.
Another measure to improve security is the use of “strong customer authentication”. From 14 September 2019, you must undergo strong customer authentication when accessing your payment account online or initiating payments.
In Luxembourg, strong authentication will involve using a LuxTrust Token or Mobile Token.
