PSD2 and its Regulatory Technical Standards reshape Europe’s payment landscape by enforcing Strong Customer Authentication, dynamic linking and secure communication to reduce fraud and improve consumer protection. The paper explains how banks must open APIs to licensed third party providers, ensure secure access to accounts and apply risk based controls. Exemptions exist for low value or low risk transactions, but real time monitoring remains essential. PSD2 aims to boost competition, transparency and innovation while requiring higher security standards for all payment stakeholders.

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