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PSD2 explained - what is it and what does it mean
PSD2 (or the second Payment Services Directive) is European legislation, together with the UK’s Open Banking regulation it affects the way you share your financial data. Here are some of its features and how they’ll affect you.
Smarter data sharing
PSD2 and Open Banking will change the way financial data is shared between banks and third parties, including FMS and accounting software providers such as QuickBooks. Bank feeds will be upgraded too, so you’ll get a much better connection.
Intuit QuickBooks was one of the first companies to register with the Financial Conduct Authority for qualified third-party status under PSD2. If you’re sharing your bank details with another organisation, make sure they’re authorized too. Check the FCA’s Register or the Open Banking Directory.
Better bank connections
Outdated bank feeds will be phased out over the summer as part of PSD2, so if your bank is connected to your FMS account, you’ll need to update it. It’s a speedy, simple process in QuickBooks — we’ll give you step-by-step instructions in time for the switch in September. And the good news is, the upgraded feeds will be more stable and accurate than the current system. You’ll just need to re-authorise the connection every 3 months.
Challenger banks welcome
PSD2’s focus on improving competition has made it easier for more banks to sync up with third party providers. So if your accounting software hasn’t supported connections to your bank in the past, take another look. QuickBooks is now syncing up with a whole host of banks we didn’t support in the past, including the top UK Challenger banks – Monzo, Revolut and Starling. That means more customers can tap into our time-saving features.
Access all areas?
Under PSD2/Open Banking, you have complete control of who can access your financial data. You can grant specific permission to third parties such as QuickBooks, or withdraw it at any time – so if you only grant access to a current account, your credit card account won’t be automatically included.
Personalised products
When you choose to share your data with third parties, you’ll get a smarter service, including automated accounting and access to more customised lending or budgeting options. And as competition increases, you can expect the range of available options to keep improving.
Improved security
The peace of mind you’ll get from improved levels of security is one of the key benefits of Open Banking and PSD2. Under the new system you can sync accounts without having to hand over passwords or login details to third parties.
Instead, with your permission a third party will ask your bank for access to your financial data, and they will contact your bank. Then you just log in to your bank as usual to authorise the connection. It’s as easy as that!
Find this article about PSD2 useful? Did you know the QuickBooks blog covers a wide range of business-related topics designed to help you grow and develop your business.
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