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What is PSD2 and how does it impact your daily card payments?

If you make card payments every day, you should кnow about the new legislation called PSD2. Standing for Payment Services Directive 2 and in force since 14 September 2019, this new document brings a number of changes to the world of payments. Don’t worry if you don’t know what they are – you will now find out!

Let’s start!

What is PSD2 and why do we need it?

Succeeding the Payment Services Directive of year 2007, PSD2 brings a number of alterations that aim to better protect consumers during online payments, promote the development and use of innovative online and mobile payments such as through open banking, and make cross-border European payment services safer. But the most visible and important difference is the new requirement for Strong Customer Authentication (SCA) when making card transactions either face to face or in an in-store environment.

The changes related to SCA

If you make Chip and PIN transactions or MO/TO payments, PSD2 will not affect you in any way. But this is where new developments step in. In a few simple words you will be asked to enter your PIN when making contactless payments with your Visa or Mastercard card in the following cases:

  • You make a single transaction above EUR 50.
  • You make consecutive contactless payments exceeding EUR 150 in total.
  • You make five consecutive contactless payments and each one of them is below EUR 50 – during your 6th transaction your PIN will be required and upon entering it correctly the counter will be reset.

In all other cases you will not have to enter your PIN until you bump into one of these requirements again.

The way forward

Card transactions are the new norm for paying and getting paid and we will continue to witness more innovations in favour of customer convenience and protection, so there’s nothing you should be worried of. Again, PSD2 aims to improve security for end users like you, so now your card transactions will be better protected against fraud, card thefts, etc. All you need to do is enter your PIN more often, which should not be a problem at all.

So next time you are getting your favorite coffee don’t get startled if you are asked to put in your card PIN – it’s all to your benefit and part of the game.

See you at the card reader!

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