Revised Payment Services Directive (PSD2)

The revised Payment Services Directive (PSD2) is the EU legislation which sets regulatory requirements for firms that provide payment services. The banking industry is currently working on how to standardise the way data is accessed through ‘Open Banking’ standards. Our page, and the Money Advice Service provide more information.

PSD2 was published in the European Union's Official Journal on 23 December 2015. It aims to:

  • contribute to a more integrated and efficient European payments market
  • improve the level playing field for payment service providers
  • promote the development and use of innovative online and mobile payments
  • make payments safer and more secure
  • protect consumers
  • encourage lower prices for payments

PSD2 governs the authorisation and prudential requirements for payment institutions and sets the conduct of business requirements for providing payment services. To find out how PSD2 affects your business, use the PSD2 Navigator.

Timeline

The Payment Services Regulations 2017 implemented the Directive into national law effective from 13 January 2018. The job of implementing some of the provisions was delegated to the European Banking Authority (EBA). These provisions include regulatory technical standards (RTS) and guidelines. 

The Treasury consulted on implementing PSD2 through the Payment Services Regulations 2017 in February 2017. We issued a consultation (CP17/11) to reflect the Treasury’s new regulations in April 2017. This included proposals for guidance in our revised Approach Document, which combines the existing Payment Services and E-Money Approach Documents. It also included proposed changes to our Handbook and notifications for businesses using exclusions from regulation.

We issued a smaller follow-up consultation (CP17/22) on authorisation forms and certain reporting forms under PSD2 in July 2017.

The Treasury published the final Payment Services Regulations 2017. We issued a joint communication with the Treasury on PSD2 and open banking following the publication of these regulations. 

We issued a policy statement in September 2017 confirming the revised Approach Document and Handbook changes following consultation feedback. 

We issued a Handbook Notice in July 2018 confirming further Approach Document and Handbook changes following a Quarterly Consultation Paper in March 2018.

We issued a policy statement in December 2018 confirming further Approach Document and Handbook changes to incorporate new rules and guidance to implement regulatory technical standards for strong customer authentication and common and secure open standards of communication (SCA-RTS) and related guidelines developed by the European Banking Authority under the revised Payment Services Directive (PSD2). We consulted on these changes in CP18/25.

Firms affected by PSD2

PSD2 is relevant both for firms which are already authorised or registered and firms that will have to seek authorisation or registration or notify us of certain information as a result of the changes. This includes all existing payment service providers (PSPs), including banks, building societies, credit card providers, money remitters and e-money issuers.

Video guides

Payments department overview

Our Head of Payments, Maha El Dimachki, and her team give an overview of the department’s work and how we supervise and authorise firms.

View more FCA video guides on payments services

Technical standards under PSD2 come into effect on 14 September 2019, and some requirements need to be met before that date. 

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