PSD2, also known as the Payment Services Directive 2 is a set of laws and regulations established by the European Banking Authority (EBA) that aims to improve consumer rights while also promoting competition within the financial industry.
The directive not only enhances the safety of payments across the European Union, but also enables the development and use of innovative new technologies.
Besides the possibilities for new products and services enabled by the PSD2 (e.g. PISP), another important element of the PSD2 is to better protect customers when paying online.
PSD2 requires more security and mandates Strong Customer Authentication (SCA), which is also known as Two-Factor Authentication (2FA).