PSD2 – EBA Dials Up Flexibility To Achieve A More Balanced Approach

On February 23, the European Banking Authority (EBA) published its updated, and final, Regulatory Technical Standard (RTS) on Strong Customer Authentication (SCA) and common and secure communication under the revised Payment Services Directive (PSD2).

Heeding some of the pressure following the public consultation on the earlier draft, to which the EBA received an unprecedented 224 responses raising over 300 different issues, the regulator introduced some important changes aimed at both increasing flexibility and providing clarity for firms. In this post we set out our view on some of the key changes the industry should be aware of.

Strong Customer Authentication

The EBA introduced two additional exemptions to its general requirement that Payment Service Providers (PSPs) must apply SCA every time a payer initiates an electronic payment transaction.