Directive On Payment Services (PSD2) and Customer Authentication

Apr 19, 2017

The revised Directive on Payment Services (PSD2) is to be implemented in January 2018. PSD2 is going to introduce new rules focused on opening access to payment account information to 3rd parties.

The Payment Services Directive (PSD, 2007/64/EC) is an EU Directive, administered by the European Commission (Directorate General Internal Market) to regulate payment services and payment service providers throughout the European Union (EU) and European Economic Area (EEA).

Authentication procedures will be based on the following 3 elements – knowledge, possession, inherence. These elements should be independent to ensure that compromise of one does not compromise the other(s). The process of authentication should aim to protect the confidentiality of the authentication data and connect it to the amount and payee for remote electronic payments in a dynamic manner.

If you’re concerned about customer authentication, turn to, the #1 high risk processor in the US that offers unmatched security and protection for payment processing. EMB has an A+ rating with the BBB and is rated A by Card Payment Options. EMB is one of Inc. 500’s Fastest Growing Companies of 2016.

The EU’s 1st Payment Services Directive was introduced in 2007. Later, after the revision of the PSD, EU decided to include online-based payment services. The new PSD2 was enacted by the European Commission in October 2015. It’s projected to enter into force in January 2018.

The 2nd edition of the Payment Services Directive will bring its consequences in the field of customer authentication for payments in online trade. Ideally, this will lead to a high level of convenience and security for end customers and enable merchants and service providers to gain competitive advantages through new services.

The 3rd parties will be providers of account information services (AIS) and providers of payment initiation services (PIS) under PSD2. They will need a license as such. AIS providers will be able to extract a customer’s account information data, including transaction history and balances. As for PIS providers, they will be able to initiate online payments to e-merchants directly from the payer’s bank account using an online portal.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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