EUnPSD2

EUnPSD2, or the European Union Payment Services Directive 2, is a regulatory framework aimed at enhancing the security and efficiency of payment services within the European Union. It builds upon the original PSD2 directive, which was introduced in 2015, and was updated in 2018 to address the evolving landscape of digital payments and financial technology.

The primary objective of EUnPSD2 is to promote competition and innovation in the payment services sector by mandating that payment service providers (PSPs) offer their customers access to third-party providers' payment initiation services. This access is facilitated through open application programming interfaces (APIs), allowing customers to manage their payments more conveniently and securely.

Key provisions of EUnPSD2 include strong customer authentication (SCA) measures to prevent fraud and unauthorized transactions. SCA requires at least two forms of identification, such as a password and a one-time code sent to a mobile device, to authorize a payment. Additionally, EUnPSD2 mandates that payment service providers implement robust security measures to protect customer data and prevent cyber threats.

The directive also emphasizes the importance of data protection and privacy, requiring PSPs to comply with the General Data Protection Regulation (GDPR). This includes obtaining explicit consent from customers for the use of their personal data and ensuring that data is processed lawfully, fairly, and transparently.

EUnPSD2 aims to create a more seamless and secure payment environment, benefiting both consumers and businesses. By fostering competition and innovation, the directive encourages the development of new payment solutions that meet the evolving needs of customers. It also enhances the security of payment services, protecting consumers from fraud and unauthorized transactions. Overall, EUnPSD2 plays a crucial role in shaping the future of digital payments in the European Union.