On 23 June 2022, the European Banking Authority (EBA) responded to the European Commission’s call for advice on the review of the revised Payment Services Directive (PSD2). The EBA’s response takes the form of an opinion and a report and offers more than 200 proposals to help develop the EU retail payments market.
The PSD2 contains a review clause in Article 108, which requires the Commission to report on the application and impact of the Directive to the co-legislators (the European Parliament and the Council), the European Central Bank and the European Economic and Social Committee. In that regard, on 20 October 2021, the Commission submitted to the EBA a call for advice regarding the review of the PSD2. The objective of the call for advice is for the Commission to gather evidence on the application and impact of the PSD2, which includes any benefits and challenges that may have arisen, and for the EBA to identify areas where amendments to the PSD2 might be appropriate.
The EBA’s proposals include:
- Merging the PSD2 and the Electronic Money Directive.
- Clarifying the application of strong customer authentication (SCA) and the transactions in scope.
- Addressing new security risks for customers such as social engineering fraud where customers are tricked into initiating a payment transaction.
- Addressing concerns about authentication approaches (e.g. based on smartphones) that have led to exclusion of certain groups of society from using payment services online.
- Moving from ‘Open banking’ to ‘Open finance’ (or otherwise the expansion from access to payment accounts data towards access to other types of financial data) and the opportunities and potential challenges associated with it, based on the PSD2 experience.
- Addressing unwarranted de-risking practices by banks affecting payment and e-money institutions.