PSD2 - What changes will you notice?
Ban on surcharges
While the PSD2 contains various measures, the ban on surcharges is the most relevant change at this time for online merchants. According to the European Union, the idea behind the ban is that it should be easier for consumers to equally choose between different payment methods. For example, a consumer might be more likely to use a credit card for payment if he or she does not have to pay a 2% surcharge.
The ban therefore relates to these surcharges, or additional costs. In this regard, the following conditions apply:
- Surcharging is no longer permitted on payments made by consumers from the European Union. This ban applies to all Visa and MasterCard payments. It does not apply to payment transactions made with business/corporate cards. Surcharging is also not permitted on standard transfers and direct debits.
- In cases where surcharging is allowed, the amount charged to the consumer may never exceed the actual costs. Unfortunately, the Directive does not indicate which payment methods this point applies to specifically. We expect that this matter will be further clarified in the years ahead. Examples of payment methods which do currently fall under this measure include American Express and Klarna.
Access to payment accounts by third parties and security
Another important guideline covers access to customers’ payment accounts by third parties. In this case, banks must give third parties access to the customer’s payment account, provided that the customer gives his or her consent. This makes it possible to develop new business models using financial data that, until now, was exclusively available to banks. Third parties can additionally analyze transaction data and use this information for purposes such as offering better phone plans or assessing consumers’ creditworthiness.
Finally, the new regulations aim to improve the security of payments as well. While you as a business owner will not notice many payment-related changes in practice, your customers certainly will. In some cases, your customers will have to complete two-step verification. This means that the payment can only be finalized after confirmation by means of a code that is linked to the customer’s mobile number. Credit card issuer ICS already uses this process, for instance.
Interpretation varies by country
Although the regulations have been adopted EU-wide, the interpretation of the Directive can vary from one country to the next. As an example, the PSD2 states that surcharging is no longer permitted on nearly all debit and credit card payments. However, it is not always clear whether certain payment methods are based on a debit or credit card. In these cases, individual countries can decide for themselves what is and is not allowed. This means that the regulations for your business can vary depending on the country where a particular card was issued.
Please note! Passing on costs to customers by means of surcharging is your own choice. Whether and how you do this is up to you. Furthermore, surcharging may or may not be possible depending on the specific webshop system you use. You are therefore responsible for complying with (local) laws and regulations at all times.