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Payment Services Directive (PSD2) Solution Brief

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1. What is PSD2?

The Payment Services Directive (PSD2) is an EU Directive, by the EBA (European Banking Authority) and the European Commission (Directorate General Internal Market). The PSD went into force December 2007 and was updated with the Payment Service Directive 2 (PSD2) in 2015 with safer and more innovative rules aimed to better protect consumers when they use digital channels.

 

2. Who is Impacted?

The payment services and payment service providers. The PSD2 directives directly impact all financial institutions and payment services providers doing business throughout the European Union (EU) and European Economic Area (EEA) Additionally, banking regulations like the PSD2 are being closely watched by regulators globally when developing their own national frameworks.

 

3. What are the PSD2 Directives?

Payment Service Providers (PSPs) and financial institutions need to devise an authentication method that uses two elements:

  1. One element categorized as knowledge (such as a password).
  2. One element as inherence (such as Behavioral Biometrics).

 

4. How does PSD2 affect the consumer?

If the PSP does not provide strong customer authentication, then the customer will not incur any financial losses unless the customer has acted fraudulently.

A PSP is required to use strong customer authentication where the customer:

  1. Accesses a payment account online
  2. Initiates an electronic payment transaction
  3. Carries out any action through a remote channel which may imply a risk of payment fraud or other abuses

Additionally, the PSPs must provide strong customer authentication that includes elements which dynamically link the transaction to a specific amount and a specific customer. Doing this with BehavioSec’s behavorial biometric software allows for less friction and smoother payments.

 

5. What is Behavioral Biometrics?

Complements one-time things you know, like passwords, with continuous authentication, based on who you are. BehavioSec’s software uses behavioral factors, like the way people hold, swipe, or type, to provide real-time detection of digital identities actively interacting with mobile and web apps.

 

6. How can Behavioral Biometrics be used by payment providers?

Payment providers can integrate BehavioSec’s Behavioral Biometric SDKs into existing or new apps (mobile and web). They can also transparently authenticate their users via REST APIs from BehavioSec’s platform to the app user community.

 

7. How can I evaluate BehavioSec’s Behavioral Biometrics?

Visit www.behaviosec.com or contact one of our reps by emailing demo@behaviosec.com.