PSD2

PSD2 is the second Payment Services Directive, designed by the countries of the European Union (Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market).

What PSD2 does?

  • Increases the security of payments in electronic banking by
  • Introducing two-step verification through at least two elements from the following categories:
    • knowledge; information only known to you, e.g., password, PIN.
    • ownership; something that only you have access to, e.g., telephone, token, payment card or your own features, e.g., biometric data.
  • Introduction of payment services as part of open banking.

Refer to the official text of Directive (EU) 2015/2366, also known as the Payment Services Directive (PSD2), which regulates payment services and payment service providers within the European Union and European Economic Area.

PSD2 is for banks, not for merchants. This means that to comply with the law in their home country, issuing banks must refuse non-compliant transactions. To avoid the risk of issuing banks refusing your transactions, you as a merchant need to ensure that your transactions comply with PSD2 SCA regulations.

What do you gain?

Thanks to PSD2, you get:

  • access to all payment accounts (kept in various banks) in one place.
  • immediate verification of the current financial situation.
  • secure transaction confirmation.
  • automated processes, e.g., credit verification process.
  • access to open banking and consent management for external service providers.

PSD2 API

The PSD2 API is a standardized set of application programming interfaces that enables secure and regulated access to payment services and customers' banking information. It is part of the European Union's PSD2 regulation, which aims to enhance competition, innovation, and security in the financial industry.

It is a REST API that allows 3rd-party providers to access payment accounts created with snappi.