PSD2 modernizes payment systems in the EU by fostering innovation, enhancing security, and protecting consumers.

• Open Banking: Mandates secure sharing of customer data with third-party providers.
• Strong Customer Authentication: Enhances payment security through multi-factor authentication.
• Consumer Protections: Sets standards for liability and refunds.

Adopted in 2015, PSD2 became effective on January 13, 2018, with ongoing refinements.

• Financial Penalties: Institutions may face significant fines.
• Reputational Harm: Breaches may erode consumer trust.
• Operational Risks: Non-compliance can lead to service disruptions.

• Consumer Trust: Enhances confidence in secure payment systems.
• Market Access: Enables participation in the EU’s digital payment ecosystem.
• Risk Mitigation: Reduces exposure to fraud and cyber threats.