All you need to know about PSD2

Totally up to speed with the new European payment directive

All you need to know about PSD2

Totally up to speed with the new European payment directive

You may have heard that PSD2 is coming soon and – with it – numerous changes. It's been quite some time in the making. Ten years ago, the European Parliament introduced the first payment directive (PSD1) to create a more uniform market for payment services within the EU. 

Much has changed since then in terms of technology, but also consumer behaviour. The European Parliament consequently thought it was high time for an update. To prevent misunderstandings about the new EU Payment Services Directive (PSD2), here's what it's all about.

What is PSD2?

Like PSD1, the revised and updated Payment Services Directive (PSD2) creates a legal framework for simpler, faster, and more secure payments in the EU. But what does that mean in practice? 

1. Opening up account information

The most profound change is that banks have to open up account information to recognised third party providers. Companies (not only banks) will therefore be able to carry out payments for you, check the balance on your account and extract your account details.

An example could be third parties like Payconiq asking to connect to your KBC Brussels account. If you agree, Payconiq can access your account information to provide services for you. 

That might raise your eyebrows, but there's no need to worry. Consumers have total control over whether to share account information with other parties. We will never share your data without your approval.

What's more, you can stop access at any time.

KBC Brussels is the first bank in Belgium to give you the option of viewing details and balances of any current accounts you hold at other banks in KBC Brussels Mobile. Find out how easy it is

2. No more surcharges

Thanks to PSD2, surcharges can no longer be applied for certain payment methods. Online shops currently charge a little extra if you pay by credit card, but that will soon be history.

3. More payment security

Today you can pay for things in many new and different ways. Fingerprint and facial recognition technology are just some of the innovations in the world of payments. Until now, there was no EU regulatory framework for it. PSD2 introduces new and stringent rules to make payments safer and more secure.

How will this affect you?

Apart from the benefits given above, little will actually change for you. You still have control and you decide who can access your data

When giving access to your account, we recommend that you always check whether the party requesting access is trustworthy. Stay alert for phishing e-mails. Criminals can possibly use PSD2 for fraudulent purposes.

Why is PSD2 being introduced?

The first payment directive (PSD1) dating back to 2007 already created a legal framework for a uniform payment market in the European Union. It provided new rules for direct debits (such as IBAN and BIC) and payments using debit and credit cards. 

However, due to the introduction of many new technologies and changing consumer behaviour (like online shopping), PSD1 is due for a very much needed update.  

The European Union therefore wants to boost recent innovation and attract more players to the market, without compromising consumer protection and security.

When will PSD2 enter info force?

PSD2 has to be implemented into Belgian law by 2018.  

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