The PSD is part of an EU initiative to harmonise the way payments are made and received within the EU and it will apply to everyday payments such as cash deposits and withdrawals, credit transfers, direct debits, credit and debit card payments, money remittance payments and other digital payment services.

It aims to promote competition and will create three types of payment service provider structures: (1) banks and building societies, (2) electronic-money institutions, and (3) ‘payment institutions’ which can offer payment services in competition with other providers. It will also provide conduct rules for payment service providers and customers, which set out their rights and obligations, and providers will have to give customers specified transactional information.

The FSA, who will be responsible for supervising firms who have operations that fall within the scope of the PSD, has published a new webpage which provides information on the obligations and notification requirements applying to payment institutions under the Payment Services Regulations 2009.