PSD2 or Payment Services Directive 2 is legislation, which has been in force since September 14, 2019. PSD2 is especially important in the world of payments as it brings a number of changes that aim to protect consumers when it comes to online payments.
SCA or Strong Customer Authentication is a new requirement when making card transactions face-to-face or in an in-store environment, under the PSD2 legislation.
PSD2 establishes legislative changes to the way payments are managed in the EU. It is the successor of the Payment Services Directive (PSD) designed back in 2007 to regulate and create a single payment market in the European Union.
The aim was to increase competition, liberalise the payments industry, increase consumer safety, stimulate innovation and set the rights and obligations of payment providers and users. PSD2, in fact, appears as a revised version of PSD back in 2013, scheduled to come into effect in 2018/19.