PSD2 Directive: good news for business travel!

Companies which, in May 2018, implemented the General Data Protection Regulation (GDPR), now need to prepare for compliance with the new Payment Services Directive (PSD2). It comes into force in September of this year raising a number of concerns and, above all, many questions. Must we march to the beat of new regulations every year?

Here are some clarifications on this subject.

PSD2 is the updated version of the 2009 Payment Services Directive, the objectives of which are to stimulate competition on the European continent, improve the quality of services and, ultimately, protect consumers.

Although we aren’t aware of this, PSD2 has already been in effect since January 2018 to enable European citizens to benefit from cheaper, safer and more innovative payment services. In plain terms, it is no longer permissible to apply additional charges for debit or credit card payments, whether online or in shops. In the same vein, the excess payable by the cardholder for fraudulent payments has been lowered from 150 to 50 euros.

Other provisions will only be effective from September 2019, one of which is more directly related to the business travel sector and client authentication when making a card payment. The PSD2 Directive will require at least two cardholder identification factors (PIN code, password, available device , biometric data, etc.) to make an online payment of more than 30 euros.

This new lowered threshold applies to all types of purchases, especially when booking a hotel room or a train or plane ticket.

In summary, GDPR aims to protect consumers’ personal data and PSD2 is a way to strengthen payment protection by rendering financial transactions more secure. This Directive is considered a new constraint, as it forces all those participating in e-commerce to make technical changes, with a view to ensuring internet traffic is more secure when making online purchases.

Payment methods are a fundamental part of the business model for business-related travel, due to the financial challenges associated with a significant increase in daily transactions.

As such, the European authorities are playing their part in protecting the data of European consumers and ensuring their transactions are secure.

 

Glossary

PSD2 = Payment Services Directive 2. This European directive follows on from PSD1, an initial directive which, in 2010, laid the groundwork for a consistent European market relating to payments: SEPA (Single Euro Payments Area).

Strong or two-factor authentication = combines the use of two elements from the three categories: something you know (password, PIN), something you own (computer, mobile phone) and something you are (fingerprint, retina, voice).

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