With the PSD1 (Payment Services Directive 1), which enter into force in 2009 for the first time in EU countries, the main aim of the European Union was to develop an efficient, fast, standardized, secure and competitive payment market among the union countries. With the revision made by the European Commission in 2015, PSD2 (Payment Services Directive 2) replaced PSD1. It entered into force in the EU in 2018.
Two different notions have ensued with PSD2.
- AISP — Account Information Service Provider
AISP is a service that enables the customer to monitor account information in multiple banks from a single screen.
- PISP — Payment Initiation Service Provider
PIPS is a service where the customer can make online purchases through a third party payment provider.
What’s new in PSD2:
- Power passes to the customer with PSD2. Expanding customer rights. With the banks’ APIs, PSD2 allows the sharing of customer information, which is only in the hands of the banks, to third parties allowed by the customer. This is starting a new era for payment service providers.
- Users who have accounts in more than one bank will be able to access and manage their accounts in all banks from a single screen. Account Information Service Provider, which is one of the new notion we met with PSD2, will enable this process.
- It will bring more security measures in online payment transactions.
What are the goals of PSD2?
- Paving the way for service providers to provide more innovative solutions.
- Support the use and development of online applications.
- Protecting the consumer by expanding customer rights.
- Setting standards for electronic payment applications.
It is a directive that creates a new competitive environment between banks and service providers and increases service.
Finally, AISP and PIPS should perform customer sanction screening and ensure AML compliance.