Implementing the revised EU Payment Services Directive

What is the background to HMT’s consultation?

PSD2 was published in the EU’s Official Journal on 23 December 2015 and is now in the process of being implemented in each EU Member State before the January 2018 implementation deadline.

PSD2 aims to:

• encourage an integrated and efficient European payments market
• provide a level playing field for payment service providers
• promote innovative online and mobile payments, which should also encourage lower prices for payments as new market entrants challenge the pricing models of more established firms
• make payments safer and more secure and protect consumers

Firms affected by PSD2 include:

• all existing payment service providers (PSPs), such as banks, building societies, credit card providers, money remitters and e-money issuers
• a range of firms that are not currently required to be FCA-authorised or regulated, including firms that provide services that are currently exempt from regulation because of the limited network, ‘digital download’ or commercial agent exemptions, and
• third party firms who are to be given access rights to obtain data about accounts and to initiate payments using their third party software or services (subject to individual customer consents). These third party firms are called account information service providers (AISPs) and payment initiation service providers (PISPs) and PSD2 contains new provisions enabling these third party firms to access account information currently kept only within PSPs (such as banks), which is seen as crucial to driving a more competitive market in payment transactions and to reflect the use of mobile apps provided by th