Third-party providers come under PSD2 scrutiny

Payment providers looking to capitalize on open banking will have to jump through regulatory hoops to prove they are able to offer the services they claim, under the final set of rules from PSD2.

Open banking is a simple-sounding concept – the rules around it, however, are anything but.

Under the European Union’s second payment services directive (PSD2), strong customer authentication (SCA) aims to ensure that the third parties that banks deal with are who they claim they are. 

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Mark Hewlett, Ebury

To meet this need, adequate proof needs to be provided. This proof comes in the form of two or more elements defined as knowledge (something only the user will know), possession (something only the user possesses) or inherence (something that the user is).

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