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Payment Services Directive 2 (Psd2) Meaning

PSD2 is a landmark European Union regulation designed to revolutionize the payments industry by increasing competition, enhancing security, and fostering innovation. Its most significant contribution is the mandate for open banking, which requires traditional banks to provide authorized third-party providers with secure API access to customer account data.

This effectively broke the monopoly banks held over financial data.A core technical requirement of PSD2 is Strong Customer Authentication (SCA). To reduce fraud, most electronic payments now require a two-factor check.

This must involve at least two elements: something you know (a password), something you have (a phone or hardware token), and something you are (biometrics). While this added friction to the checkout process, it significantly lowered the rates of unauthorized online transactions across the Eurozone.PSD2 also created new categories of financial entities: AISPs (Account Information Service Providers) and PISPs (Payment Initiation Service Providers).

An AISP can aggregate all your bank accounts into one app to give you a broad view of your finances. A PISP can initiate a payment directly from your bank account to a merchant, bypassing the expensive credit card networks entirely, which lowers fees for businesses and speeds up settlement.For the fintech industry, PSD2 was the starting gun for a wave of innovation.

It allowed startups to build overlay services on top of existing bank infrastructure, leading to the rise of neobanks and advanced budgeting tools. While it is an EU regulation, its principles have influenced open banking frameworks globally, as regulators in other regions look to replicate the European model of data portability and consumer-centric financial services.

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Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

Finery Markets’ software is non-custodial and is provided exclusively to licensed institutional entities that act as independent operators of their own environments. All counterparties are solely responsible for establishing and maintaining their own bilateral trading and settlement relationships. Finery Markets is not a party to any such arrangements and assumes no responsibility for the conduct, verification, or compliance obligations of any users of the software.

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