The second Payment Services Directive or PSD2 is a European law which comes into full force on 14th September 2019.
PSD2 aims to make it more secure for you to make electronic payments when shopping online or using online banking services.
While some elements of the PSD2 legislation have applied from 13th January 2018, the full rollout from September 2019 will result in changes to how you use digital payments channels and shop online by introducing added security rules referred as Strong Customer Authentication (SCA).
What is Strong Customer Authentication (SCA)?
The principle of SCA is to increase security for electronic payments through the introduction of two factor authentication protocols. You will be asked to confirm your identity by using the following factors, each of which are independent of each other:
SCA will be used when accessing online payment accounts or shopping online.
Customer authentication is in use today however with PSD2 it is likely to be used more frequently to provide enhanced security.
SCA shall apply when accessing your account online and when initiating an electronic payment. It applies to all payments made within the EEA.
Under PSD2 the following exemptions may apply: