UK: PSD2 RTS On Authentication And Communication – EU Commission Proposes Amendments

The EBA has now published the EU Commission's proposed amendments to its draft RTS on Strong Customer Authentication (SCA) and common and secure communication under the revised Payment Services Directive (PSD2), as well as the Commission's accompanying letter setting out the main changes introduced. Both documents were submitted to the EBA on Wednesday 24 May, but were not made public until Friday 1 June.

As per the Commission's letter, the main amendments are:

  1. Independent auditing of the security measures in cases where the transaction risk analysis exemption is applied. (Ref. Chapter 1, Article 3(2) of the EBA draft and of the Commission's amended RTS).

    Payment Service Providers (PSPs) making use of the SCA "Transaction risk analysis" exemption (as per Article 18) shall have a statutory audit performed for the methodology, the model and the reported fraud rates at a minimum on a yearly basis. The Commission has introduced this to ensure that the risk analysis methodology employed is objective and consistent.
  2. Introduction of a new exemption to SCA for certain corporate payment processes. (Ref. Chapter III, NEW Article 17)

    PSPs shall be allowed not to apply SCA in respect of legal persons initiating electronic payment transactions through the use of dedicated corporate payment processes or protocols, provided the relevant competent authority confirms ex-ante, that they are satisfied that those processes or protocols guarantee at least equivalent levels of security to those aimed for by PSD2.
  3. Fraud reporting by PSPs directly to the EBA. (Ref. Chapter III, Articles 16(2) and 17(2) of the EBA draft - Article 18 and 19 of the Commission's amended RTS)

    The Commission added more details to the way that PSPs need to calculate the risk score of each payment transaction. In addition, the methodology and any model used by the PSP to calculate the fraud rates, as well as the fraud rates themselves, shall be documented and made fully available to competent authorities as well as to EBA. This means that the EBA will have access to individual fraud data from PSPs rather than relying on high-level, aggregated data reported by competent authorities.
  4. Contingency measures in case of unavailability or inadequate performance of the dedicated communication interface. (Ref. Chapter 5, Article 28 of the EBA draft – Article 33 of the Commission's amended RTS)

    As expected, the Commission introduced an amendment to the RTS stating that, if the dedicated interface is unavailable for more than 30 seconds during a communication session between PSPs, or where it does not operate in compliance with the requirements under Articles 30 and 32 (General obligations for a dedicated interface), Payment Initiation Services Providers (PISPs) and account information services providers (AISPs) should be allowed access to the interfaces made available to the payment service users for directly accessing their payment account online, until the dedicated interface has resumed functioning. Several conditions apply (see Article 33 (3) for more details), including identification and authentication procedures, but effectively this provision reintroduces an element of screen scraping as a contingency measure.

    The EBA proposal to ban screen scraping had been welcomed by banks, but was hotly contested by the FinTech sector, which thought it would leave third parties providers (TPPs) at a disadvantage. To allay concerns, the Commission made this change to ensure that unavailability or inadequate performance of the dedicated interface does not prevent PISPs and AISPs from offering their services to their users. Otherwise a bank would be able to offer its own payment services through the user-facing interfaces, which operate without any difficulties, while PISPs and AISPs would not be able to do so.

    While the compromise makes sense in theory, it remains to be seen how workable it is in practice. On one hand, banks will need to upgrade their user-facing interfaces to be able to identify TPPs, make sure they are only allowed access if the dedicated interface is unavailable, and safeguard the sensitive customers' information TPPs do not have permission to access. On the other, as communication interfaces may differ for each bank, TPPs will need to build and maintain different connectivity solutions for every bank they wish to connect to, and for both the bank's dedicated and user-facing interfaces – which could prove costly and time consuming.

Finally, whereas the additional SCA exemption for corporate payments and the additional assurances on Transaction Risk Analysis and fraud models are welcome, the proposed amendments further prolong the period of transition between the implementation date of PSD2 (January 2018) and the date when the provisions included in this RTS will become applicable – now estimated in Spring 2019. This creates additional challenges for both new entrants, which for example will not be able to rely on APIs for almost another two years, and for incumbent banks, which will have to continue supporting existing solutions (e.g. screen scraping), while at the same time developing their RTS compliant communications interfaces.

Next steps

  • The EBA has until 5 July to give its opinion on the amended RTS
  • After this period, the Commission can adopt the RTS taking into account the EBA's opinion or disregarding it
  • Once the Commission has officially adopted the RTS, the three months scrutiny period of the Parliament and Council will start

For further reading on this topic please visit:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions