Compliance
What Is PSD2 in Payments?
Overview of PSD2, relevance to Australian taxi payment systems
Intro
The Payment Services Directive 2 (PSD2) is a European regulation that aims to make payments more secure, boost innovation, and help banking services adapt to new technologies. It's important for businesses that handle online payments.
Main Definition
PSD2 is a directive from the European Union that regulates payment services and payment service providers throughout the EU and European Economic Area. It requires banks to open their payment services and customer data to third-party providers, with customer consent, to foster competition and innovation. This is crucial for businesses as it enhances security and provides more options for payment processing. A common misunderstanding is that PSD2 only affects banks, but it also impacts any business involved in processing payments.
Examples
Examples of PSD2 in action include:
A small online retailer using a third-party payment service to offer customers more payment options.
A startup developing a new financial app that accesses bank data to provide budgeting tools, thanks to PSD2's open banking rules.
A taxi service integrating multiple payment methods to enhance customer convenience and security.
Key Relationships
PSD2 is closely related to several business concepts:
Cash Flow: By enabling more efficient payment processing, PSD2 can help improve cash flow for businesses.
Expenses: Businesses may incur costs to comply with PSD2, such as upgrading security measures.
Tax: Accurate payment processing under PSD2 can aid in better tax reporting and compliance.
Compliance: Businesses must ensure they comply with PSD2 regulations to avoid penalties.
Frequently Asked Questions
Do I need to comply with PSD2 if my business is outside the EU?
Yes, if you process payments for customers within the EU, you need to comply with PSD2.How does PSD2 affect customer data?
PSD2 requires customer consent for data sharing, enhancing data protection and privacy.What is Strong Customer Authentication (SCA) under PSD2?
SCA is a requirement for authenticating payments to increase security, typically involving two-factor authentication.
