What is PSD2 and how does it relate to Open Banking?
PSD2 (Payment Services Directive 2) is an EU Directive regulating payment services. Among other things, PSD2 regulates access from Account Information Service Providers (AISP) and Payment Initiation Service Provider (PISP) to payment accounts held at Account Servicing Payment Service Providers (ASPSPs).
EU has issued the PSD2 regulation that strives to make payments safer, increase consumer protection, foster innovation and competition while ensuring an equal playing field for all market players.
PSD2 stipulates that:
- The customer can grant third-party service providers access to the customers payment account information at the customers’ bank;
- The customer can grant third-party service providers permission to initiate payments from the customers ICA Banken bank accounts;
- Authentication processes related to payment account information and payment transactions must adhere to updated rules on strong customer authentication.
ICA Banken will make this possible by creating open APIs that allow 3rd parties to integrate their services with ICA Banken.
Open APIs enables Open Banking which is a broader term covering access via open APIs to banks services in general, while PSD2 concerns only access to payment accounts.