What options does the PSD2 Payment Directive offer you?

The Payment Service Directive 2 (PSD2) came into effect on 19 February 2019. PSD2 is a new European Directive for payment services. This new Directive enables holders of a payment account to grant other service providers than their own bank access to their payment accounts. It is up to the individual account holder to decide if they consent to this.

What is PSD?

The Payment Service Directive (PSD) regulates payment services within the European Union. The first Directive, PSD1 was introduced in 2009. It allowed anyone, without exception, to make domestic and international payments. PSD1 also introduced the option for non-banks to provide payment services (provided they have the requisite licence), including iDEAL, Adyen, and Mollie.

What are the new features of the PSD2?

PSD2 (in Dutch) goes quite a bit further than that. Essentially, it makes you the owner of your financial data. As the holder of a payment account, you can decide to allow parties other than your own bank access to the payment account. Banks, along with Fintech companies, are developing new applications and services for business owners and consumers. This is known as psd2 banking. To implement this, they require a PSD2 licence from the Dutch Central Bank (DNB) or another regulator based in the European Union.

What can entrepreneurs do with the PSD2 Payment Directive?

The arrival of PSD2 will see the emergence of competing payment services providers involved in developing new services. For example, alternatives for POS and credit card payments. As an entrepreneur, you can ask your client for access to the (business) current account. This gives you the opportunity to check if the amount of the delivery is available in the account. You can start the payment with the consent of your customer; this could make the payment easier and more economical.

Do you require a loan? With your consent, the financier can check and evaluate your account details electronically. You are no longer required to collect and send account details.

What must an entrepreneur do with the PSD2 Payment Directive?

PSD2 has had 2 implications for business owners:

• (Online) shops are not permitted to ask for a fee for payments with a regular credit card, transfers, and automatic direct debits. For other payment tools, the retailer is permitted to charge the actual expenses to consumers.
• For pre-authorisations for pin-and credit card payments, the seller must clearly state the amount set aside as a temporary deposit. After final delivery, the actual amount is paid. And the amount of the pre-authorisation must be released immediately. Pre-authorisations are common at unstaffed petrol stations, hotels, and car rental companies.

What options does the PSD2 offer you as a private individual?

PSD2 banking is easy whenever the iDEAL payment tool is not available and you do not have a credit card or PayPal account. In addition, there are new methods for electronic payment at the cash register. Besides banks, other businesses can also provide new payment services.

Service providers can use your payment account details, for example, to create your digital chequebook. This also applies if you hold multiple current accounts with several banks. You may find this convenient if you need a financial product, including a consumer loan or a mortgage.

Under PSD2, you no longer pay a fee when using one of the common credit cards. Also, there is no insurance excess in the event that your bank card is stolen or lost.

It is important that you personally decide whether to use a particular service and provide others access to this service. If you do not give your consent, nothing will change. Then, any third party will not have access to your current account.

When did PSD2 take effect?

PSD2 entered into force in the Netherlands on 19 February 2019. SCA, an additional security feature, was introduced for online credit card payments (in Dutch) in January 2021.