PSD2 One Year On: Where is Our Payments Revolution?

03rd May 2019
Robbie MacDiarmid
Robbie MacDiarmid

Report Overview

When the European Commission announced the Second Payment Services Directive, it was hailed as a new era of banking. With the regulation originally scheduled to come into force on 13th January 2018, to many it seemed that a payments revolution was imminent, and PSD2 was the catalyst. One year on, we look at what has actually happened so far and assess the main problems that merchants are facing in light of the regulation.

In this document, we discuss the directive in more detail, before assessing the progress made over a year after the directive came into effect. In this assessment, we explore open banking and the barriers to progress in the market, strong customer authentication and the technical issues facing merchants, as well as the impact of the surcharging ban.

Please email Senior Economist, Robbie MacDiarmid, at to request the report.

Topics Covered Include:

Open Banking

We analyse the impact of PSD2's open banking initiative including case studies and barriers to entry.


What is SCA and how will it enhance the protection of end consumers?

The Surcharging Ban

The consequences and how merchants are burdened with costs far in excess of those intended.

It remains unclear exactly when this revolution will come to fruition, and the timeline has been pushed further and further back as more technical problems arise. At this point, regulators must focus on ensuring
a coherent reading of each of the mandates; provide adequate guidance to industry players, and potentially reassess certain areas of the directive to be updated in a future PSD3.
Merchants, in particular, should not wait for the revolution to come to them, but instead be driving it.

Robbie MacDiarmid - Economic Analyst

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