The new PSD2 regime will be in force from 13 January 2018. PSD2 is an EU Directive which sets requirements for firms that provide payment services, and will affect banks and building societies, payment institutions, e-money institutions and their customers. As well as promoting innovation, PSD2 aims to improve customer protection, make payments safer and more secure and drive down the costs of payment services.
PSD2 also brings a number of new rules around how firms treat their customers and handle customer complaints, as well as the data they must report to the FCA. It requires existing payment institutions and e-money institutions to be re-authorised or re-registered. If you think you may need to seek authorisation or registration due to the changes taking place, you need to take action now.
Where things do go wrong, customer complaints under PSD2 will now have to be resolved more quickly than is currently required. Customers’ exposure to liability will also be reduced where they have suffered losses.
The security of payments will be improved by new requirements on PSPs. These requirements seek to mitigate the risks that can arise as a result of new technology. Strong Customer Authentication (SCA – also known as two-factor authentication), once introduced, has the potential to protect consumers accessing their payment accounts from the risk of fraud or abuse.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
‘Competition in the retail banking and payments is vital to UK consumers and the wider economy. PSD2 builds on this by giving consumers more choice around how they manage their payments and bank accounts. It also brings in some important protections for consumers and seeks to increase the security of payments.’
‘Firms should make sure they know what’s required of them to be ready for the new regime. We will continue to monitor closely whether competition in the market improves in the interests of consumers.’
It’s essential that your business is fully prepared for the changes coming into force. To make sure that your business is compliant PSPs should read the PS and the revised Approach Document from the FCA to understand the requirements that will apply from January the 13th.
If you would like to discuss the implications that this may have on your currency or cash management requirements, please get in touch and one of expert advisors will be on hand to help.