What regulatory focus does the Payment Services Directive (PSD2) have in banking?

The Payment Services Directive (PSD2) primarily focuses on creating a more integrated and efficient payments market within the European Union while also enhancing consumer protection. This regulation was designed to improve the existing framework for payment services, ensuring that there is a level playing field for all players in the payment ecosystem, including banks, fintechs, and other service providers.

By promoting competition and innovation, PSD2 allows third-party providers to access customer accounts (with their consent) to offer enhanced payment services. This feature not only fosters new technological advancements but also improves the consumer experience by providing more choices and potentially lower costs. Furthermore, it establishes stronger security measures to protect consumers against fraud and unauthorized transactions, thus addressing key aspects of consumer protection.

Through these efforts, PSD2 contributes to the overall goal of a more streamlined and secure payments landscape across the EU, which aligns with modern digital banking needs and consumer expectations.