Day after day, companies have been forced to make technological changes in order to adapt to new regulations, technological innovations and advances in society.

One of these changes that companies are now facing is the PSD2 digital payments regulation, which has gone into action since September 14, 2019.

What is PSD2?

PSD2 is the European regulation focused on electronic payment services. This system aims to facilitate and give maximum security to monetary transactions in Europe.

The PSD2 laws have been adapted and renewed according to technological advances and cybersecurity. In November 2018, the European Union communicated the new PSD2 regulation in order to fight against fraud in electronic payments, which has now entered into force on 14 September 2019.

What is the PSD2 regulation?

Some experts have announced that the new regulation will radically change the way we shop on the internet. But what does this new regulation really consist of?

Until now, when we wanted to make an online purchase, the platform redirected us to a payment gateway in which we had to insert certain information from our bank card (such as the number, expiration date and CVV). In many cases, this action is complemented with verification codes sent via SMS.

Therefore, we need a series of intermediaries to contact the company issuing the card, in order to indicate to our bank that the payment should be charged to another bank account.

With the new PSD2 regulation, every time the customer wants to make a digital payment, they must authenticate themselves using three ways: something you have (for example, coordinate card, mobile or ID card), something you know (a password or code, for example) or something you are (biometric proof such as voice or fingerprint).

In other words, bank cards will no longer be necessary to make purchases over the internet, nor will we be redirected to external payment gateways. With the new law, there will no longer be intermediaries and purchases can be made in a much easier way between client-company with total security.

How can companies adapt to this new law?

Faced with this, companies must adapt and have resources that adapt to the new regulations.

For example, payments through DTMF, i.e. by means of written insertion of digits, must update their resources, as this system will not serve them. Thus, other tools arrive that assume the role of the new regulation, such as telephone charging with a credit card.

This system, in addition to adapting to the new regulations, is integrated into a virtual PBX service. This also allows companies to offer customer service over the phone, as well as make payments over the phone.

However, given that many companies have not yet made any changes in their payment methods and are not ready to apply the new regulations, the Bank of Spain announced on September 5th a moratorium of 14 to 18 months for its full application.

The Bank of Spain points out that there will be no more postponements, and companies will have to adapt as soon as possible to this new law. This law aims to improve the security of both businesses and their customers, reduce intermediaries, and make businesses more competitive.

By Emma Smith