PSD2: Getting Ready for the Next Generation of Payment Services (Part 1)

The European Commission's long awaited revision of the Payment Services Directive (PSD2) will bring a range of new players inside the regulatory regime.

The Commission's assessment of the 2007 Payment Services Directive (PSD) was that it was generally fit for purpose but needed to be updated to reflect the dynamic nature of the payments services market. At the same time, the Commission highlighted inconsistencies in the way in which Member States had implemented PSD and the consequential fragmentation of the payments services market along national borders, especially in internet and mobile payments. In order to address these challenges, it has changed the scope of the PSD and expanded the type of services for which organisations will require to be authorised or registered as payment services institutions.

PSD will be repealed and replaced by PSD2. Among the more important changes in the e-commerce and m-payments space are:

E-commerce platforms will no longer be able to rely on the "commercial agent" exemption to escape regulation where they act for both the buyer and seller in a...