PSD2 is the Payment Services Directive that replaced the original regulation Directive 2007/64/EC by the new Directive (EU) 2015/2366. No matter where you live, it gives us a good idea about how payment services are going to evolve.
This regulation tries to focus on two main factors:
- Safety
- Freedom
Until now, VISA and MasterCard were ruling the payments world. Usually, when you are shopping online and you proceed to pay with your credit card, you will notice that you have to visit a pop up page made by Visa or MasterCard in order to prove your identity.
They usually ask you for your name, card number, and the CVV code. Sometimes, the system also adds an extra verification measure by sending you an SMS with a code to enter on the page.
The PSD2 does not agree that you should go through your credit card company’s site to make a purchase. They state that you should be able to do it just on the shop page. In other words, the shop and your bank will not need a middleman any more. This way, you will better control who has access to your data.
What Are the Changes for Consumers?
In principle, consumers can expect to benefit from higher competition. Fees should be lower in the future.
They will also need to adapt to new security measures. It won’t be possible to make a payment just with your credit card anymore.
From now on, you will need to be able to verify that you are who you say you are. This can be done by using two of three options: something you have, something you know, or something you are.
- An example of something you have is your mobile phone. You can verify like before with an SMS or through a verification app that your bank should develop.
- Something you are is more exciting. You can verify by using your fingerprint.
- Something you know can be the traditional PIN number.
However, this has a downside. In both cases, if we are down-to-earth, this translates in the same tool: your mobile phone.
So be ready to have mobile apps related to your bank accounts. And maybe, also be ready to pay for a good mobile antivirus.
Be Careful with Phishing Practices
As usual, the weakest link of the chain are human beings. Keep in mind that your bank will not contact you to let you know about a security issue and then ask you for your password, PIN, or any other data.
They can ask you if you remember buying something, but they won’t ask you for security details. If you receive an email or phone call asking about it, just close it. You can call the bank yourself and ask about it.
It is always safer when you call the official number, than when they call you. When you call, you can be sure that you are talking with an official agent from the bank and not a scammer.
Further Reading
Other bank related articles you may be interested include: