The Payment Services Directive (PSD) was adopted in 2007 and provides the legal foundation for an EU single market for payments, to establish safer and more innovative payment services across the EU.
Since its introduction the PSD has brought certain benefits to the EU economy but the European Commission sought to review the Directive in order to modernise it so that new types of payment services, such as payment initiation services, could be taken into account.
In July 2013 the Commission published a package of legislative measures on payment services, which included a revised PSD (PSD2) and a proposal for a Regulation on interchange fees for card based payment transactions. The latter Regulation entered into force on 9 June 2015.
The PSD2 widens the scope of the PSD by covering new services and players as well as by extending the scope of existing services (payment instruments issued by payment service providers that do not manage the account of the payment service user), enabling their access to payment accounts.
The PSD2 also updates the telecom exemption by limiting it mainly to micro-payments for digital services and includes transactions with third countries when only one of the payment service providers is located within the EU. It also enhances cooperation and information exchange between authorities in the context of authorisation and supervision of payment institutions. The European Banking Authority will develop a central register of authorised and registered payment institutions. The PSD2 also introduces enhanced security measures to be implemented by all payment service providers, including banks.
The European Parliament has now adopted the PSD2. Following the Parliament’s adoption the PSD2 will be formally adopted by the EU Council of Ministers in the near future. The PSD2 will then be published in the Official Journal of the EU. From that date, Member States will have two years to introduce the necessary changes in their national laws in order to comply with the new rules.