PSD3 Compliance Identity Verification: What You Need to Know
Blog post from Didit
PSD3, the forthcoming Third Payment Services Directive, is poised to enhance the regulatory landscape for digital payments within the European Union, emphasizing improved consumer protection, fraud prevention, and fostering innovation. Building on PSD2, PSD3 will impose stricter Strong Customer Authentication (SCA) requirements, reduce exemptions, and integrate advanced biometrics and fraud detection systems to ensure secure and reliable identity verification processes. Financial institutions and payment service providers are encouraged to audit their current systems, invest in advanced identity verification technologies, and prepare for changes in transaction monitoring and onboarding procedures. The directive aims to address the limitations of PSD2, particularly in fraud prevention and consistent SCA application, while accommodating emerging payment technologies and promoting better data sharing practices among financial institutions. As PSD3's implementation timeline is still being finalized, proactive preparation is advised to ensure compliance and seamless adaptation to these regulatory updates.
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