What is PSD2?
In short
PSD2 is the second European directive on payment services, which requires banks to give other licensed parties access to a payment account if the account holder consents. That lets accounting software retrieve your bank transactions automatically or prepare payments.
What does PSD2 regulate?
PSD2 (Payment Services Directive 2) is the European Directive (EU) 2015/2366 on payment services. An important part of it is that banks open the door to other licensed parties:
- Account information services may, with your consent, read your balance and transactions. That is how accounting software retrieves your bank transactions.
- Payment initiation services may, with your consent, prepare a payment for you, which you then confirm yourself.
PSD2 also requires strong customer authentication: logging in and paying with two proofs, such as your banking app and a PIN or fingerprint (see two-step verification).
What does it mean for your accounts?
With a PSD2 bank feed, your bank transactions appear in your accounting software automatically, without downloading and importing files. The package often already suggests which invoice or general ledger account a payment belongs to. The consent does expire: according to ABN AMRO, a company may access your account data for a maximum of 180 days, after which you confirm your consent again. Your package tells you when that is needed.
What should you look out for?
- Check that your bank is supported, including for a second account or a credit card.
- Ask who provides the connection: the software supplier itself or a licensed specialist.
- Only give consent via your own bank's environment, and never by giving your login details to someone else.
Which software helps with this?
Most online accounting packages retrieve bank transactions via PSD2, directly or through a specialist provider. Ask which banks are supported and how often you need to renew your consent.