It is now more than ten years ago that the European Parliament launched PSD1, the first Payment Services Directive, intended to create a more uniform payments market within the European Union.
But technology evolves, as does consumer behaviour. The European Parliament consequently felt it was high time for an update. To avoid misunderstandings about the new EU Payment Services Directive (PSD2), here's what it's all about.
What is PSD2?
PSD2 stands for Payment Services Directive 2 and has the same purpose as PSD1: to create a legal framework for simpler, faster and more secure payments within the EU. But what does that mean in practice?
1. Making accounts available
The most profound change is that banks have to make customers’ payment accounts (usually current accounts) that can be accessed online – and the information on them – available to approved third party providers. Companies (not just banks) will therefore be able to arrange payments for you, check the balance in your account and extract account details.
Example: third parties like Payconiq can now ask to connect to your KBC account. If you agree, Payconiq can access your account to provide its services to you.
That might raise your eyebrows, but there's no need to worry. As a customer you have total control over whether to share account information with other parties. KBC will never share your data without your approval.
What's more, you can stop access at any time.
KBC also ensures that you can view your current account details and balances at other banks using KBC Mobile . Find out how easy it is.
2. No more surcharges
PSD2 prohibits payees (merchants, online stores, etc.) from levying surcharges for the use of particular payment methods. For instance, online shops may no longer charge an additional fee if you pay by credit card.
3. More payment security
Today you have many new and different ways to confirm your electronic payment instructions, such as using your fingerprint or face recognition when making payments from a mobile app. Until now, there was no EU regulatory framework for this. PSD2 introduces new and stringent rules to make payments safer and more secure.
How will this affect you?
Apart from the benefits given above, little will change for you. You still have control and you decide who can access your data.
When giving access to your account, we recommend that you always check whether the party requesting access is trustworthy. Also be alert for phishing e-mails. Criminals could potentially abuse PSD2 for fraudulent purposes.
When will PSD2 apply?
The first Payment Services Directive (PSD1) dating back to 2007 created a legal framework for a more uniform payments market in the European Union.
Europe is looking to open up the payments market to new players, without compromising consumer protection and security.
How quickly does KBC provide other parties with access to information?
Click here for more information about the availability and performance of information we show to other parties.
We do this for the following services
- View the account balance and obtain information about your payment transactions for the payment account(s) you have designated
- Issue a payment instruction
- Ask whether a specific amount is available in your account
Other questions
PSD2 is for virtually everyone who has to make or receive payments: consumers, businesses, banks and payment institutions. PSD2 covers things such as paying in shops and making online purchases.
A third party need not be a financial institution in order to be able to view your account details.
With your permission, a third party can
- View the account balance and obtain information about your payment transactions for the payment account(s) you have designated
- Issue a payment instruction
- Ask whether a specific amount is available in your account
1. Access to your account balance and/or payment transactions or issuing a payment instruction
If a third party wishes to do one of the following in relation to one or more of your payment accounts:
- access your account balance
- access a summary of your payment transactions
- issue a payment instruction
You must of course first give your permission for this. With your explicit permission, the third party concerned can request access to your payment account, provided it is accessible online. The third party can then request account information from KBC or issue a payment instruction.
You do not have to give this permission. You have total control over who you allow to access your payment account. Unless agreed otherwise, you only need to give permission to a third party once. It remains in force until you withdraw it.
2. Asking about the availability of a specific amount
Say you have a card or electronic purse issued by a third party, or that a third party offers you a payment service, and that third party asks KBC whether a specific amount that is needed to make a payment is available in your payment account. In that case, KBC can only answer the request if you have given your permission in advance. The answer from KBC will be limited to ‘yes’ or ‘no'.
Before the third party can request your account information from KBC, you must first log in to the KBC app (e.g. using your PIN or your card reader).
- For your account balance, you only need to log in once
- For your account information, you will need to log in again every 90 days
- For payment instructions, you will need to log in and sign each instruction, for example using your PIN or card reader
It is the responsibility of the third party to propose other payment options. However, it is under no obligation to offer such additional options.
If a third party is given access to your account information, KBC will ensure that this takes place securely and reliably on each occasion.
- Every third party must identify itself to the bank by means of a specific certificate.
- We always check whether the third party is in possession of the required licence/permit.
- We also ensure that communications between KBC and the third party are conducted securely. Logging in and signing take place using the digital KBC channels, which are secure and reliable.
- The KBC Mobile, KBC Touch or KBC Business Dashboard contain a list of the third parties to whom you have given permission to access your payment accounts.
- You can withdraw your permission at any time from a third party. If you are unable to do so, or if the third party does not comply, KBC offers you the possibility of cancelling the access you have granted in your KBC app. KBC will then inform the third party of this.
In principle, the third party cannot use your account information for other purposes. The third party will have to seek permission, whilst respecting your privacy.
Always check what the third party intends to do with your data and precisely what you are giving your permission for.
As an agent holding power of attorney, with your present power of attorney you may not share account information with third parties. The principal granting power of attorney must first give their permission for this. Contact your branch for more information.
