Consumers warned to act in advance of new online banking rules

Banking federation urges consumers to take simple measures to be ready for changes

PSD2 is a new European law which is due to come into affect on September 14th. Photograph: iStock

PSD2 is a new European law which is due to come into affect on September 14th. Photograph: iStock

 

Irish consumers who use online banking could face significant disruption in the weeks ahead if they do not act on instructions from their banks, the Banking & Payment Federation Ireland (BPFI) has warned.

The federation said consumers need to prepare for changes in how they access and use their online and mobile banking services with the rollout of PSD2 (the second Payment Services Directive).

PSD2 is a European law which is due to come into affect on September 14th with a view to offering better protection for consumers and businesses by enhancing security for online banking and thereby reducing fraud. The increased security measures, known as “strong customer authentication” will see some changes to how customers access and use online or mobile banking.

While the changes vary across individual banks, they will generally take the form of an additional security step before customers can access their online accounts.

Customers should have received information in recent weeks from their bank advising them of any action they may need to take, such as registering or updating their mobile phone number or downloading an updated mobile app.

“It is vital that customers follow these instructions to avoid any inconvenience when accessing their online and mobile banking services from September 14th,” the BPFI said.

Speaking at the start of a week-long awareness campaign to highlight the changes, Gill Murphy, the BPFI’s head of payment schemes, said consumers should “carefully read the information provided by their bank in relation to PSD2.

“This information will outline what changes customers can expect as well as any actions that they may need to take in order to ensure continued access to their online accounts without interruption. It is important to remember that these changes are being introduced across Europe to help counter fraud and provide better protection for consumers and their online accounts.”

Open Banking

In addition to enhancing security, PSD2 will also introduce what is known as Open Banking. This will allow third party providers (TPPs) to securely provide consumers with some new services such as the ability to pay directly from a bank account as an alternative to a debit or credit card when shopping online.

Open Banking will also allow for account information services such as providing consumers and businesses with a single view of their online banking accounts across different institutions. As these new services become available consumers are being assured that TPPs can only access accounts with the consent of the account holder. TPPs will be regulated in a similar way to banks.