PSD2 (Payment Services Directive 2)

Definition

The EU directive (2015/2366) that regulates payment services and payment service providers, mandating strong customer authentication, open banking through account access APIs (XS2A), and enhanced consumer protection. PSD2 has fundamentally reshaped the European payments landscape by requiring banks to provide licensed third parties with access to customer account data and payment initiation capabilities. It is a cornerstone of the open banking movement and has enabled an ecosystem of fintech services built on bank-held data.