The European Commission is considering updating the PSD2 payments directive to PSD3.
New payment services have been created through this directive.
If a few years ago the Second Payment Services Directive, the so-called PSD2 , came into force, the aim of which is to adapt the regulatory framework to the emergence of new services, there is already talk of PSD3. Banking entities, FinTechs and companies must know how to integrate new forms of payment to manage their company.
Discover how businesses are czech republic email list integrating new forms of payment into their daily management. Optimize your operations and provide an exceptional experience to your customers!
Current regulation: PSD2
PSD2 creates a level playing field for all payment service providers with the aim of improving payment choice and security. It introduces third-party payment service providers (third-party PSPs) which requires banks and other PSP account administrators to allow access to their customers' accounts to such third-party PSPs.
And this through the creation of two new services:
The payment initiation service , which consists of initiating a payment order at the request of a client from an account held with another payment service provider
The account information or account aggregation service , which consists of providing consolidated information about one or more payment accounts held by the user with one or more additional PSPs
The purpose of the Second Payment Services Directive, known as PSD2 , is to adapt the regulatory framework to the emergence of new services.
The FIDO (Fast Identification Online) computer security standard sets out the steps to follow. Strong authentication will thus combine two factors among the following elements:
What we know: password, PIN code, secret phrase.
What we have: magnetic card, RFID, USB key, chip card, smartphone, or an authentication card or token.
What we are: fingerprint, retinal print, hand structure, facial bone structure or any other biometric element.
What we know how to do or what we do: behavioral biometrics, handwritten signature, voice recognition, a type of calculation known only to oneself, a behavior, etc.
Where we are located: A place from where, after having successfully identified and authenticated ourselves, access is authorized to a logical system at a prescribed location.
Approaching instant payment
Available for both individuals and companies, Instant Payment or SEPA Instant Credit Transfer is a new payment method available in the 34 countries in the SEPA zone , which allows bank transfers to be made in real time (about 10 seconds).
In this way, anyone can make and receive an instant transfer, at any time of the day, 7 days a week, with immediate interbank clearing between the payer and the recipient.
It is worth noting that:
Instant SEPA transfers are limited to €15,000.
This new payment method will not be mandatory nor will it replace the Sepa Credit Transfer (SCT).
Instant payment, as well as being an alternative to cards and cheques , represents a great opportunity for merchants, whether virtual or with a physical store, and also for companies, etc., as it reduces risks, guarantees payments, reduces management costs, saves staff, etc.
For payment service providers, it is also a unique opportunity to develop new products and services for consumers and businesses.
Opt for a paid software program that is reliable and scalable
New regulatory framework, new services. It is clear that we are witnessing an evolution of payment services today.
Therefore, it is best to ensure that our company's treasury management software is capable of integrating all these new developments.
And, in this sense, Sage XRT Treasury has this evolutionary capacity, and also recently integrates the verification of bank coordinates proposed by SEPAmail with Diamond.
Learn more about the benefits of the integrated and modular treasury solution, Sage XRT Treasury.
The next directive: PSD3
PSD2 is followed by PSD3 . Although this new directive is still to be implemented, steps are already being taken towards its completion. The European Commission has presented new proposals to boost the digitalisation of payments and the financial sector.
These measures aim to improve consumer protection and foster competition in electronic payments , while allowing consumers to securely share their data to access a wide range of better and cheaper financial products and services.
These proposals are primarily intended to safeguard consumer interests, promote competition and strengthen security and trust.
According to the European Commission, payment services have undergone significant changes in recent years due to the rise of electronic payments and the entry of new providers offering open banking and financial technology (fintech) services. However, more sophisticated forms of fraud have also emerged, posing a risk to consumers and undermining trust in the system.
The current Payment Services Directive (PSD2) is to be revised and updated to PSD3. In addition, a Payment Services Regulation (PSR) will be established. These measures aim to combat and mitigate payment fraud by allowing service providers to share information on fraud :
increasing consumer awareness ,
Strengthening customer authentication rules
and expanding refund rights for consumers who are victims of fraud,
among other actions.
More security and transparency with PSD3
Security and transparency will be two of the main focuses of PSD3. The European Commission suggests extending the right to compensation in the event of verification failures . In this way, customers would be compensated and would have the possibility of recovering all of their money if they are victims of identity theft. To do so, they would be subject to certain conditions, such as filing a complaint with the police authorities and not having been seriously negligent, such as having fallen for the same scam.
