Payments in the digital market: Evaluating the contribution of Payment Services Directive II

This article evaluates the implications of PSD II for payments in the digital market against a background of the European Commission's Digital Market Strategy. It analyses the core elements of PSD II relevant to payments in the digital market. These include the expansion of the scope of the directive; changes in the rights and obligations of the parties and the allocation of liability for unauthorised payment transactions; and, the introduction of security and authentication requirements in the online context. The article also highlights the more harmonised approach to enforcement and the close involvement of the European Banking Authority. The article also identifies gaps in the PSD II framework and speculates that these will ultimately have to be addressed if the Commission's Digital Market Strategy is to be achieved. Thus, it concludes that, while the reforms introduced in PSD II will improve the quality of payment services and enhance e-commerce within the European Union, some payment-related impediments to the perfection of the internal digital market remain.