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An Accountant’s Guide to PSD2

13 January 2018 was a big date in the accounting calendar – were you ready? This is the day that PSD2, the second, amended Payment Services Directive, comes into force in the EEA. If you’re worried about compliance, or unsure of all the changes that will be enshrined in law after this date, never fear, just follow our useful tips for accountants on complying with PSD2.

Quick recap: what exactly is PSD2?

PSD stands for the Payment Services Directive. This was a piece of legislation first introduced in the EU back in 2007, with rules for payment providers to regulate the way that payments are made within the EU and EEA. PSD2 is an updated version of the Directive, which takes into account the developments that have occurred in the years since it was originally put in place.

The new and improved Directive includes extra regulations to cover online payments, mobile transactions and fraud, introducing rules for Payment Initiation Services Providers (PISPs) who will be able to act as middlemen by accessing customer bank details with permission, for a more efficient transaction. PSD2 will also legislate for third party Account Information Service Providers (AISPs), set up to allow consumers to access all of their financial information in one central place.

Banks and businesses accepting payments and AISPs working within the European Economic Area (which encompasses all EU states, plus Iceland, Norway and Liechtenstein) have had some time to prepare for PSD2, which was announced back in 2016, but 13 January 2018 is the cut-off date for compliance. Companies will penalised if they do not comply after this date.

Tips for accountants: managing your accounts after 13 January 2018

The cost of non-compliance with PSD2 is significant, and could set companies back as much as 4% of their global turnover. So, it’s important to get things right; these handy hints and useful tips are designed to help you feel confident moving forward after the PSD2 implementation date.

  • Know your stuff. As an accountant, you need to know where you stand in relation to PSD2. Do your homework by referring to the PSD2 in its original form. See the full PSD2 text here, and read guidelines from the European Banking Authority on its implementation.
  • Check your accounting software. If you use a cloud-based accounting software provider such as AccountsIQ, the chances are they have already put everything in place to comply with PSD2 – but do double check with your provider so that you know exactly what’s what. If, on the other hand, you have an in-house accounting system, you may need to review your procedures in order to ensure compliance.
  • See it as an opportunity. It’s easy to get bogged down worrying about compliance, but for many businesses, PSD2 opens up new opportunities. Could your business become a Payment Initiation Service Provider, accessing customer bank details direct for more efficient payments? Or perhaps your bank could offer authentication services to businesses in need of secure and reliable payment authentication. As an accountant, you may be the most authoritative PSD2 ‘expert’ within your organisation, so be sure to inform decision makers of the potential that this significant piece of legislation might represent for your company.