Abbreviations in PSD2

PSD2 (the Second Payment Services Directive) has several commonly used abbreviations and acronyms that are important for understanding its key components. Here are some of the most necessary and widely used abbreviations:

1. PSP - Payment Service Provider

Refers to entities authorized to offer payment services, including banks, fintech companies, and other financial institutions.

2. TPP - Third-Party Provider

External service providers that offer payment services or access to payment accounts. There are different types of TPPs, such as AISP and PISP.

3. AISP - Account Information Service Provider

Provides aggregated account information services, enabling customers to view their financial data from multiple bank accounts in one place.

4. PISP - Payment Initiation Service Provider

Allows initiating payments directly from the customer’s bank account, often used in e-commerce transactions as an alternative to card payments.

5. ASPSP - Account Servicing Payment Service Provider

The financial institutions (e.g., banks) that hold and manage the customer’s payment accounts and provide access to TPPs.

6. SCA - Strong Customer Authentication

A security requirement under PSD2 to ensure that electronic payments are performed with multi-factor authentication for enhanced security.

7. RTS - Regulatory Technical Standards

Regulatory standards that define how various elements of PSD2 should be implemented, such as SCA requirements and secure communication standards.

8. EBA - European Banking Authority

The European Union agency responsible for ensuring effective and consistent regulation and supervision under PSD2.

9. XS2A - Access to Account

The provision under PSD2 that mandates banks to provide secure access to customer accounts for TPPs, enabling open banking.

10. PII - Personally Identifiable Information

Refers to sensitive data related to an individual that must be protected in compliance with data privacy regulations like GDPR.

These abbreviations form the foundation of understanding PSD2 and its requirements, particularly in the context of open banking and payment services.