PSD2 Compliance
PSD2 (Payment Services Directive 2) is a European Union regulation that mandates open banking standards, requiring banks to provide third-party providers (TPPs) with secure access to customer account data and payment initiation services through APIs. It aims to increase competition, innovation, and security in the financial services industry by enabling fintech companies to build services on top of banking infrastructure. Compliance involves implementing strong customer authentication (SCA), data protection measures, and standardized API interfaces.
Developers should learn about PSD2 compliance when building financial technology applications, such as payment gateways, budgeting tools, or account aggregation services, that interact with European banks. It is essential for ensuring legal adherence, enhancing security with features like two-factor authentication, and leveraging open banking opportunities to create innovative customer-facing solutions. Understanding PSD2 helps in designing systems that handle sensitive financial data responsibly and integrate seamlessly with banking APIs.