PSD2 Implementation: Mandatory for Payment Services in Europe
Payment Services Directive 2 (PSD2) applies across EU/UK. Requirement: Banks & payment processors must offer open APIs by law. For payment apps: Must implement SCA (strong customer authentication), handle consent, process GDPR data. Compliance deadline: Already passed (2021), now enforced. Penalties: €1M+ per violation.
SCA (Strong Customer Authentication) Requirements
SCA mandatory for payments >€100. Multi-factor auth (2FA). Methods: SMS OTP, biometric, hardware token. Implementation: 3D Secure 2.0 standard (DSS protocol).
Open Banking API Standards
REST API: JSON-based, OAuth 2.0 authorization. eIDAS Signatures: Digital signatures for transactions. Encryption: End-to-end encryption, TLS 1.3.
Cost to Implement PSD2
$50-150K for existing payment apps. 3-6 months to full compliance.
