PSD2 – better service, more opportunities

The Payment Services Directive PSD2 that comes into force in early next year will entail a plenty of useful improvements.

Adopted by the European Parliament, the Payment Services Directive 2 (PSD2) is aimed at improving consumer rights and promote competition in the banking sector and thereby increase the range of service for customers. PSD2 enables you, for example, to utilise the applications of players other than your own bank in using your accounts and making payments. The law will enter into force on 13 January 2018 but the changes will not take effect overnight but gradually.

Several improvements for consumers expected as early as the beginning of 2018

PSD2 will bring a number of changes that improve consumer rights as early as the beginning of 2018. This is our list of the improvements:

  • A consumer’s liability for card abuse in the case of minor or ordinary negligence will decrease from 150 euros to 50 euros.
  • Any additional expenses charged by the merchant will be removed when paying with Visa and Mastercard credit cards.
  • Payment service providers shall in future show the used exchange rate to the payer and the costs in currency conversion services before effecting the payment.
  • Customers will also enjoy more rights in terms of a 15 business day deadline for customer complaints set for banks.

Other changes will be phased in during the next two years

The most significant changes arising from legislation will be gradually seen during the next two years. Some services provided by banks will no longer be tied to a specific bank but the customer can, if he/she so wishes, check the balance and account transactions not only in his/her own bank but also in services provided by other players. It is also expected that the adoption of PSD2 will create new payment methods independent of the bank alongside the current credit card and the online payment button. In addition to banks, services can in future be provided, for example, by large companies representing other industries or FinTech players.

To guarantee payment security, legislation places emphasis on KYC related to payment and payment confirmation. This strong authentication, as it is called, is always primarily required when using account details and payment services. This also applies to the bank’s own services. This is how legislation ensures that not only the new service providers but also the banks comply with strict security measures and data security practices so that the customer’s identity and assets remain protected as they are now too. According to the current view, this will not affect the existing authentication credentials but OP will adopt new methods despite PSD2.

It is your decision to adopt new services

PSD2 will bring changes and new opportunities to consumers, businesses and banks. Related changes will gradually take effect during the next couple of years during which banks and other service providers will introduce new products onto the market.

However, it is always your decision to adopt the new services. We at OP will continue to further develop our services and business after the adoption of PSD2 too and we aim to guarantee superior customer experience for our owner-customer irrespective of the channel involved.