How to be PSD2 compliant in 2021

PSD2 is no doubt a new and improved directive that aims to be a primary part of payment regulation in Europe. It has its direct impact on the financial infrastructures of business, banks, and the fintech industry.

Nowadays in this highly competitive world, everyone in the field of finance and banking is trying to be PSD2 compliant before time passes. Because we all know how important it is to comply with PSD2 to make payment services more authentic and secured.

That’s the reason we have penned this detailed guide to show you how to comply with PSD2 and which strategies you should acquire to be a perfect fit in PSD2 requirements. Also, you will get to know some other aspects that will for sure, help you in compliance.

But do you know what PSD is? Take a flying look to just recall.

What is the Payment services directive (PSD)

“In the 2000s European Union initiated the bank service, which could transfer the money on electronic power regardless of the place where you are and the mode of payment you are using. This was referred to as PSD.”

Now coming to our main topic let’s tell you how to be PSD2 compliant in 2021.

Let’s get started with it.

How can the business be PSD2 compliant

PSD2 compliance has the same method and aspects to follow as they were in 2019 with minor changes. Don’t worry we will also make you go through those changes too.

There are the following ways to be compliant with PSD2.

The company can choose PSD2-compliant PSP:

By choosing the paying service which is PSD2 compliant you can also help reduce the burden of your company to go through legal procedures of PSD2, so the owner’s sole concern will be the business.

Implementing 3D secure 2.0:

You as a PSD2 compliant, have to look after the checkout flow and implement 3D secure 2.0 into the payment flow. Once it is done, the business will be PSD2 compliant.

PSD2 has served the countries of the European Union. It is still finding ways to make its services better, as the point mentioned earlier proves how well it has done to overcome threats for national security if any country. Its strict policy makes it even more reliable, and it can make the payment easier and faster.

Changes made in PSD2

Let’s look into the changes PSD2 has made to provide more secure service to its people.

Online impact:

Third parties can now instantly be involved in the transaction without an intermediate source that curbs the chances of fraud groups’ presence.

Secure customer authentication:

It’s also called two-factor authentication because the customer should go through at least two types of authentication procedures out of the following three.

  • Knowledge: At first, customers can provide some token of personal knowledge, which can be served as some pin or password.
  • Possession: Consumers can observe themselves with a payment card or phone number.
  • Biometric: The customer can prove his individuality by the biometric system, which fingerprints can manifest.

Curbs risks

PSD2 curbs the risks as well. Dealers can pertain to a risky  approach where lower expenditures will be made without any confirmation, and higher fees have to be paid through a verification process that involves two steps.

Anti-fraud analysis

The anti-fraud analysis is extended to the device’s endpoint for strong SCA ( Secure Customer Authentication) procedures. Any changes will be checked strictly if they are not according to the behavioral paradigm.

The changes made in PSD2 are really good. And we hope that the system will provide more authentication and security from now onwards.

Wrap-up

PSD2 provides much to its customers because when it comes to third-party involvement, then there are high risks of endangering national security. PSD2’s check and balance system have to keep it all under its control. It has been serving for two decades, and many changes might happen in the future to make it even better.

So now in 2021, it’s nigh necessary for all financial businesses to be PSD2 compliant.

I hope this article was a good read for you. Do let us know how this article was helpful for your online business.