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What is PSD2? The rules behind open banking and secure payments

By SendPay Business · · 2 min read

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PSD2 is the EU's second Payment Services Directive, which applied from January 2018. It opened up banking to new payment companies and made online payments more secure. In the UK its rules are carried through the Payment Services Regulations 2017, overseen by the FCA.

What it changed

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Open banking

with the customer's permission, licensed companies can see account data or start payments from a bank account.

Strong customer authentication

many online payments need two separate checks, such as a phone and a PIN.

Clearer rules for payment companies on licences, refunds and fees.
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Why it matters for new platforms

PSD2 is a big reason so many new payment apps exist. It set out how non-bank payment companies can be authorised and how they must protect their customers.

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What it means for you

If you launch a platform that moves money, rules like these decide which licences apply and how your customers log in and approve payments.

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Where SendPay fits

SendPay platforms are powered by licensed partners. SendPay tells you in writing which licences apply to your platform before you launch.

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How it works

Your own money app
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  2. Choose what it does
  3. Launch when you are ready

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  • Get paid from day oneTake card payments, and share your own payment link and invoices so customers pay in a click.
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SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.

Questions people ask

How much could pay by bank save?

Compare card fees with pay by bank on your own sales.

Pay by bank savings calculator →
What is open banking?

How apps can securely connect to bank accounts.

What is open banking? →
What is strong customer authentication?

The two-step checks on many online payments.

What is SCA? →
What is an e-money institution?

How it differs from a bank.

E-money institution vs bank →

Read next

Spotted a mistake or something out of date? and we'll fix it. How our guides are made

This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.