Benefits of Europe’s PSD2 Initiative for Merchants

Thursday, January 25th, 2018

PSD2 opens up doors for a new way to pay online across Europe. The Payment Services Directive is an EU Directive, administered by the European Commission (Directorate General Internal Market). It’s called to keep payment services and payment service providers throughout the European Union (EU) and European Economic Area (EEA) under regulation.

What Are PSD and PSD2?

The Directive was developed with the purpose of increasing pan-European competition and participation in the payments industry also from non-banks. In addition, it aims at harmonizing consumer protection, and the rights and obligations of payment providers and users. The PSD was updated in 2009 and 2012.

The PSD is comprised of 2 main sections:

1. Market Rules – This section describes the type of organizations that can provide payment services
2. Business Conduct Rules – This section specifies the type of information transparency that payment service institutions should provide, including any charges, exchange rates, transaction references, and maximum execution time.

The Second Payment Services Directive (PSD2) can be described as a fundamental piece of payments-related legislation in Europe. It came into force in January 2016 and was introduced as the product of a review of the original Payment Services Directive. Due to PSD2, payment service providers (PSPs) should make a number of changes to the existing operations.

Europe’s PSD2 Initiative for Merchants

Due to PSD2, banks should provide third-party providers, such as retail merchants, with access to a consumer’s online account/payment services in a regulated and secure way, and this can’t be done without the consumer’s agreement.

The PSD2 initiative focuses on increased competition, innovation, and transparency across the European payments market while making the security of Internet payments and account access more enhanced.

The new rules are developed to provide better protection for consumers when they make payments online. Also, they aim at promoting the development and use of innovative online and mobile payments such as through open banking. Finally, the new rules are created to provide a higher level of safety for cross-border European payment services.

If you’re interested in a merchant bank account UK, all you need is to turn to a payment expert like Best Payment Providers in the UK. With Best Payment Providers, you can get free consultation and contract reviews, as well as rates, and fees so to enjoy the top payment processing solutions for your business.

The integration requirements are as much important as fees and customer service, so Best Payment Providers checks each provider’s integration process to guarantee a smooth transition and onboarding process for you.

According to Jeremy Light, the leader of Accenture’s payments practice in Europe, open banking enables retailers to enjoy a better customer experience through flexible payment initiation and faster refunds. Moreover, this is an opportunity to increase cash flow by bypassing card networks and fees and reducing fraud and chargebacks.