The application and transposition of payment services in the internal market (“PSD 2”)

Directive (EU) 2015/2366 of 25 November 2015 on payment services in the internal market (“PSD 2”) began to apply on 13 January 2018. It updates the first payment services directive (“PSD 1”) published in 2007.


PSD 2 aims to enhance competition and innovation within the European payments market, as well as improve the security of electronic payments. It takes into account emerging and innovative payment services, such as internet and mobile payments.

The three main changes PSD 2 makes to PSD 1 are the following:

– PSD 2 extends the scope of PSD 1 to payments in all currencies, and to payments where only one provider is located in the EU/European Economic Area.

– It brings within its scope certain third party payment providers that were previously unregulated.

– It also strengthens security requirements for electronic payments and for the protection of consumers’ financial data.

On 10 October 2017, bill of law 7195 transposing PSD 2 into Luxembourg Law was submitted to the Luxembourg Parliament.