The Payment Service Directive (PSD, 2007) provided the legal foundation for the creation of a European Union-wide single market for payments. The Directive offered economies of scale and supported the Single Euro Payments Area (SEPA) in practice. Furthermore, the PSD is said to have eased access for both market entrants and payment institutions offering more competition and choice to consumers.
However, a remaining lack of access, ease of entry to payment services and increased digitisation has resulted in a fragmented and disrupted payment market, in which players at times remain in a grey spot of regulation. Therefore, in 2013, the European Commission (EC) started on creating the Payment Service Directive 2.
The objective of the PSD 2
With the PSD 2, the EC aims to:
Improve the level playing field for payment service providers (PSP’s) • Contribute to a more integrated and efficient European payments market
Improve the safety and security of payments
Further increase competition and innovation
Incorporate new payment initiatives into the regulation
Standardise and harmonise pricing and liability within the European Union