Mobile and online banking are about to change for the better with the introduction of the second Payment Services Directive aiming to bring better protection and reduce fraud.
According to RTÉ, the Banking and Payment Federation Ireland (BPFI) has warned consumers to expect changes in the way they online bank as the introduction of the second Payment Services Directive roll out.
The second Payment Services Directive or PSD2 is a European law which comes into effect on 14 September. It aims to strengthen the security of electronic payments when shopping online or using online banking services.
PSD2 aims to make payments safer, increase consumer protection, lessen fraud and continue to foster innovation and competition while maintaining a level playing field for all parties.
While some elements of the PSD2 legislation were applied from 13 January 2018, the full rollout on 14 September will result in changes to how digital payments channels are used.
From then on, online shopping will change by way of the newly added security rules referred to as Strong Customer Authentication (SCA).
Each bank will communicate directly with their customers to explain how SCA will work for their accounts.
The legislation also allows for the secure provision of new services by Third Party Providers (TPPs), which is referred to as Open Banking.
So, from 14 September, your identity will be authenticated using at least two of the following factors, each of which is independent of each other:
- Knowledge – something only you know e.g., password or PIN
- Possession – something only you have e.g. a card or mobile phone
- Inherence – something you are e.g. a fingerprint or voice recognition
The BPFI is holding a week-long awareness campaign to bring the public's attention to the changes. For more information, check out their website.