Directive on Payment Services (PSD)

The Directive on Payment Services (PSD) is critical EU legislation that serves as the legal foundation for the creation and integration of a single market for payment services across the Eurozone. Enacted to facilitate and regulate the payment environment within Europe, PSD aims to make cross-border payments as straightforward and fast as domestic ones. This is chiefly achieved through the development and promotion of the Single Euro Payments Area (SEPA), which standardizes transactions across the majority of European countries, streamlining processes and reducing costs.

A key objective of the PSD is to enhance competition within the payment services market. By setting a common legal framework, the directive lowers barriers to entry for new players, allowing non-traditional financial institutions and fintech companies to offer payment services. This increased competition not only fosters innovation but also leads to greater efficiency and cost reduction for end users. Overall, the PSD is instrumental in ensuring a secure, competitive, and innovative payments landscape in Europe.