When you hear PSD2 API requirements, the European Union’s rules forcing banks to open their data to third-party providers through secure APIs. Also known as Open Banking regulations, it’s not just a technical checklist—it’s a shift in who controls your financial data. Before PSD2, banks kept your transaction history locked down. Now, if you give permission, apps like budgeting tools, loan comparators, and payment services can pull your data directly from your bank—without you logging in there.
This isn’t optional for fintechs operating in Europe. If your app needs to access bank accounts, you need to be licensed as an Account Information Service Provider (a type of fintech that collects and aggregates account data with user consent) or a Payment Initiation Service Provider (a service that can trigger payments directly from a user’s bank account). Both require strict AML compliance (anti-money laundering checks tied to customer identity verification), secure authentication using Strong Customer Authentication (SCA), and regular security audits. You can’t just slap an API onto your app and call it done. The European Banking Authority enforces this, and fines for non-compliance can hit millions.
What’s interesting is how this connects to what you’re already seeing in fintech. The same rules that force banks to open their doors also make it easier for startups to build loan underwriting tools, like those in post #103, because they can verify income and spending patterns faster. It’s why robo-advisors can now offer smarter tax coordination (post #101) — they’re pulling real-time transaction data, not asking you to upload statements. Even emergency fund strategies (post #102) benefit because users can see all their accounts in one place, thanks to PSD2-compliant aggregators.
But here’s the catch: PSD2 doesn’t stop at Europe. Fintechs outside the EU are building systems that mirror these rules because global users expect the same control. If you’re designing a financial app today, whether you’re in the U.S., Canada, or Australia, you’re likely building with PSD2-style APIs in mind. The real question isn’t whether you need to follow them—it’s whether you’re ready to build on top of them.
Below, you’ll find real examples of how companies are handling these requirements—from licensing hurdles to API design choices—so you can see what works, what doesn’t, and how to avoid the mistakes most new fintechs make in their first year.
PSD2 is Europe's law that forces banks to let you share your financial data with trusted apps - safely. It powers open banking, enables direct bank payments, and requires strong authentication. Here's how it works and why it matters.
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