The Payment Services Directive 2 (or PSD2 for short) is a piece of European Union (EU) legislation that comes into force from 14 September 2019. It aims to make banking safer, more transparent and more innovative.
This new legislation is being introduced to protect individuals and businesses when they transact online. It also satisfies the need consumers now have for a better, more frictionless online payment journey.
If it’s EU legislation, will it still apply after Brexit?
Yes, it will. PSD2 is a new law in the UK, so whatever future relationship the UK has with the EU, PSD2 will still be in force.
What will change?
One of the new safeguards is called Strong Customer Authentication (or SCA for short). This provides extra protection against fraud when transacting online. Simply put, it asks for two checks when you make purchases over the internet or when you need to service your account online. This becomes law in all EEA countries (including the UK) from 14 September 2019.