Best PSD2 Compliance Software

PSD2 Compliance Software Guide

PSD2 compliance software is designed to help financial institutions and third-party providers meet the requirements of the Revised Payment Services Directive (PSD2), a European regulation aimed at enhancing consumer rights, promoting innovation, and increasing security in electronic payments. Although a European regulation, many global companies interacting with EU customers or financial data must also ensure compliance. PSD2 mandates strong customer authentication (SCA), secure communication channels, and access to customer account data for authorized third parties, making software solutions essential for efficient and secure implementation.

These software tools typically offer features like API management, identity verification, fraud detection, and secure data sharing protocols. By enabling banks and payment service providers to open their infrastructure to licensed third-party providers in a secure and controlled way, PSD2 compliance software plays a critical role in facilitating open banking. The software ensures that access to financial data is granted only to authorized parties, using robust security frameworks and encryption techniques, while maintaining full auditability and regulatory reporting.

For companies operating in the financial sector, adopting PSD2 compliance software is not just about regulatory alignment—it also presents an opportunity to modernize infrastructure and build new digital services. By leveraging the APIs and security features embedded in these platforms, businesses can offer innovative services such as personal finance management tools, seamless payment experiences, and cross-platform integrations. Ultimately, this fosters a more competitive and customer-centric financial ecosystem, encouraging transparency and trust between consumers, banks, and fintech companies.

PSD2 Compliance Software Features

• Strong Customer Authentication (SCA): Strong Customer Authentication (SCA) is one of the core requirements of PSD2, aimed at reducing fraud and increasing the security of electronic payments. Compliance software implements SCA by supporting multi-factor authentication mechanisms that require users to verify their identity using at least two out of three possible factors: something they know (like a password or PIN), something they have (such as a mobile device or smart card), and something they are (such as a fingerprint or facial recognition). These systems are designed to work seamlessly across various channels, from mobile apps to web platforms, ensuring that user experiences remain smooth while meeting security standards.
• Access to Account (XS2A) APIs: PSD2 mandates that banks open access to customer account information to authorized third-party providers (TPPs) through standardized APIs, provided the customer gives explicit consent. PSD2 compliance software helps financial institutions develop, manage, and expose these APIs securely, covering Account Information Services (AIS), Payment Initiation Services (PIS), and Confirmation of Funds (CoF). These APIs are typically developed in line with industry standards, such as those set by the Berlin Group or Open Banking UK, ensuring compatibility and interoperability across the European market.
• Consent Management System: Consent management is a cornerstone of PSD2, as customer authorization is required before any third party can access personal financial data. Compliance software provides robust systems for capturing, storing, and managing user consent, giving customers control over what data is shared, with whom, and for how long. The software includes clear audit trails for compliance purposes and often provides customers with user-friendly dashboards to review or revoke their consent at any time, ensuring transparency and trust in the data-sharing process.
• Transaction Monitoring and Risk Analysis: To support fraud prevention and the dynamic application of SCA, PSD2 software includes sophisticated transaction monitoring tools. These systems analyze transaction patterns in real-time, using rule-based engines, behavioral analytics, and sometimes machine learning algorithms to detect anomalies or suspicious activity. When a transaction is flagged as high-risk, the system can automatically trigger additional authentication steps, allowing for real-time risk assessment and mitigation without unnecessarily burdening low-risk transactions.
• Regulatory Reporting Tools: Compliance with PSD2 involves regular reporting to financial regulators on various metrics, such as API availability, security incidents, and access statistics. PSD2 compliance software automates these reporting processes, generating the necessary monthly, quarterly, and ad-hoc reports required by supervisory authorities. These tools ensure accuracy, reduce administrative workload, and help institutions stay ahead of compliance deadlines, while also offering insights into system performance and usage trends.
• API Gateway and Developer Portal: To facilitate the integration of third-party services, PSD2 software often includes an API gateway and a fully-featured developer portal. The API gateway ensures secure, scalable access to banking APIs, while the developer portal offers TPPs access to documentation, sandbox environments, test data, and support resources. This setup accelerates TPP onboarding, simplifies integration, and helps maintain a healthy open banking ecosystem by encouraging innovation and collaboration.
• TPP Identity Verification and eIDAS Certification Handling: Under PSD2, TPPs must be registered and authenticated using Qualified Website Authentication Certificates (QWACs) issued under the eIDAS framework. Compliance software includes built-in verification mechanisms that check TPP identities against the European Banking Authority (EBA) registry and validate their eIDAS certificates. The software also manages certificate lifecycles, automating tasks such as renewal, revocation, and validation to ensure only authorized parties gain access to sensitive financial data.
• Performance and Availability Monitoring: API performance and uptime are critical metrics under PSD2, and institutions are required to meet service level expectations. PSD2 compliance software provides monitoring tools that track availability, latency, throughput, and error rates across all exposed APIs. These systems generate alerts for service disruptions, generate reports for internal and regulatory review, and help ensure that financial institutions maintain high standards of service reliability and customer satisfaction.
• Integration with Core Banking Systems: For PSD2 compliance software to be effective, it must integrate seamlessly with an institution’s existing infrastructure, including core banking systems, CRM platforms, and payment processing engines. The software typically includes middleware or connectors that bridge the gap between legacy systems and modern API layers, ensuring that data can flow securely and efficiently without requiring a complete overhaul of existing IT infrastructure. This flexibility makes adoption faster and more cost-effective.
• Secure Communication and Encryption Protocols: Security is paramount in PSD2, and compliance software ensures that all communications are protected using industry-standard encryption protocols. This includes Transport Layer Security (TLS) for data in transit, tokenization for sensitive data elements, and robust key management systems. These features help maintain the confidentiality, integrity, and authenticity of financial data, ensuring that institutions meet both PSD2 and broader cybersecurity requirements.
• Audit Logging and Forensics: Comprehensive logging is essential for transparency and post-incident investigation. PSD2 software maintains detailed logs of all user activity, API calls, consent changes, and access attempts. These logs are immutable and securely stored to support audits, regulatory inquiries, and internal investigations. In the event of a breach or dispute, these audit trails provide a clear, traceable record of system activity, helping institutions respond quickly and effectively.
• Customization and Policy Management: Different financial institutions have different operational needs and risk profiles. PSD2 compliance software offers customization capabilities that allow administrators to define authentication policies, set fraud detection thresholds, and tailor consent workflows. This flexibility ensures that organizations can fine-tune their systems to reflect their internal policies, regulatory environments, and customer expectations, while still maintaining full compliance.
• Multi-Jurisdictional Support: For banks and fintech companies operating across multiple European countries, PSD2 software often includes support for multi-jurisdictional compliance. This includes country-specific configurations, support for various national APIs and standards, and multilingual interfaces. It ensures that institutions can operate consistently and legally in all relevant markets without having to manage entirely separate compliance infrastructures for each region.
• Third-Party Risk Management: Engaging with TPPs introduces new security and operational risks. PSD2 compliance software includes tools for third-party risk management, enabling banks to assess, monitor, and control TPP access to their systems. This includes functionality to approve or block TPPs, monitor API usage patterns, and quickly revoke credentials if necessary. These features are critical for maintaining trust and security in an open banking environment.

Types of PSD2 Compliance Software

• Strong Customer Authentication (SCA) Solutions: Strong Customer Authentication software enables financial institutions to comply with the PSD2 mandate requiring multi-factor authentication for electronic payments. These solutions typically implement at least two out of three factors: something the customer knows (like a password), something the customer has (such as a mobile phone or hardware token), and something the customer is (biometric features like fingerprints or facial recognition).
• Access to Account (XS2A) Interface Software: XS2A interface software allows third-party providers (TPPs) to access bank account information or initiate payments, as authorized by the user. This type of software provides secure and standardized Application Programming Interfaces (APIs) to enable communication between banks and TPPs in accordance with PSD2.
• Transaction Monitoring and Fraud Detection Software: This category of software continuously monitors transaction activity to detect and prevent fraud, a key requirement under PSD2. These tools operate in real-time, scanning payment behavior for known fraud indicators or suspicious deviations from normal user activity. Many solutions in this category use machine learning and AI to develop adaptive models that become better at identifying fraud over time.
• Payment Initiation Service (PIS) Integration Tools: Payment Initiation Service tools are essential for allowing third-party providers to initiate payments directly from a user’s bank account, with the user’s consent. These software solutions manage the end-to-end process of initiating, authenticating, verifying, and confirming payments in real time.
• Regulatory Reporting and Compliance Software: These tools support the reporting obligations that come with PSD2 compliance, helping institutions collect, store, and transmit the necessary data to regulators. Compliance dashboards provide a central place to track key performance indicators (KPIs), such as API uptime, SCA application rates, or the number of security incidents.
• Third-Party Provider (TPP) Management Platforms: TPP management platforms help banks securely identify and interact with third-party providers. These platforms include real-time directories of licensed TPPs, enabling banks to confirm the legitimacy of access requests. They also handle the verification of eIDAS (electronic identification and trust services) certificates, which are used by TPPs to prove their identity and establish secure communication with banks.
• Testing and Sandbox Environments: Testing and sandbox software solutions allow developers, financial institutions, and regulators to evaluate the functionality and compliance of PSD2 implementations before they go live. Sandboxes simulate the behavior of live banking systems, enabling third-party providers to test their APIs, payment workflows, and security mechanisms in a safe environment.
• Customer Communication and Consent Experience Tools: Customer communication and consent experience tools are designed to make it easy for users to understand, manage, and control how their financial data is shared. These software components often include intuitive user interfaces that let users grant or revoke consent for third-party data access and payment initiation.
• Integration and Legacy System Adapters: Many traditional banks still rely on legacy systems that were not designed with open banking or PSD2 in mind. Integration and legacy system adapters provide a critical layer that connects these older platforms with modern API-based infrastructure. These tools typically include wrappers or adapters that allow existing systems to expose account data and payment services through PSD2-compliant APIs.

Advantages of PSD2 Compliance Software

• Enhanced Security Through Strong Customer Authentication (SCA): PSD2 mandates the use of Strong Customer Authentication to reduce fraud in electronic payments. Compliance software ensures that banks and third-party providers use multi-factor authentication mechanisms, which significantly reduce the chances of unauthorized access and financial crime.
• Seamless Regulatory Compliance: PSD2 compliance software automates the process of staying up to date with evolving regulations. It helps organizations implement the latest standards, monitor performance, and generate required reports, all while minimizing the risk of non-compliance penalties.
• Improved API Management for Open Banking: PSD2 opens the door to Open Banking, requiring banks to grant licensed third-party providers (TPPs) access to customer account information (with consent). Compliance software facilitates secure API integration, helping institutions expose their APIs in a controlled, scalable, and standardized manner.
• Boosted Customer Trust and Transparency: With features like consent management, real-time notifications, and better data control, PSD2 compliance software empowers customers to feel safer and more informed about how their data is being used.
• Faster Time to Market for Fintech and Banking Products: PSD2 compliance software typically includes development sandboxes, testing tools, and pre-built modules, making it faster and easier for institutions to create and deploy new financial services.
• Enhanced Fraud Detection and Risk Analysis: Advanced compliance tools integrate fraud detection engines powered by machine learning and analytics to identify suspicious patterns, reduce false positives, and proactively mitigate risks.
• Centralized Consent and Access Management: PSD2 requires banks and TPPs to collect and manage customer consent securely. Compliance software centralizes this process, ensuring traceability and legal accountability while giving users better control.
• Operational Efficiency and Cost Savings: Automating compliance tasks reduces manual work, streamlines operations, and cuts down on regulatory overhead. This allows financial institutions to focus resources on innovation rather than paperwork.
• Improved Interoperability Across the Financial Ecosystem: PSD2 compliance software ensures adherence to standard API formats (like Open Banking UK or Berlin Group), allowing banks, fintechs, and payment processors to interact smoothly across platforms and borders.
• Real-Time Monitoring and Reporting Capabilities: These tools often include dashboards and analytics features that allow compliance officers to monitor real-time activities, generate alerts, and compile regulatory reports quickly.
• Competitive Advantage and Market Differentiation: By complying efficiently and transparently with PSD2, financial institutions signal that they are trustworthy and technologically advanced. This builds stronger relationships with customers and partners.
• Scalability and Future-Readiness: PSD2 compliance software is typically built with scalability in mind, meaning it can handle growing transaction volumes and adapt to future regulatory requirements, such as digital identity or instant payments.

Who Uses PSD2 Compliance Software?

• Compliance Officers: Responsible for ensuring the institution adheres to PSD2 regulations. They use the software to monitor compliance status, generate regulatory reports, manage audits, and track obligations related to Strong Customer Authentication (SCA) and Third-Party Provider (TPP) access.
• IT Security Teams: Use PSD2 software to implement and maintain secure APIs, ensure proper identity and access management, detect and respond to potential security breaches, and enforce SCA protocols.
• API Developers: Tasked with building and maintaining secure APIs that allow TPPs to access customer account data. They rely on the software to test for PSD2 API compliance, manage sandbox environments, and monitor real-time usage.
• Risk & Fraud Analysts: Utilize analytics features within PSD2 compliance tools to detect abnormal transaction patterns, manage transaction risk analysis (TRA) exemptions, and reduce fraud rates in line with PSD2 guidelines.
• Product Managers: Work closely with compliance and tech teams to ensure new digital banking features align with PSD2 requirements. They often use dashboards and reporting features to track performance and adherence.
• Account Information Service Providers (AISPs): Use PSD2 compliance software to ensure they are securely accessing account data with user consent. They rely on it for secure communication with banks, consent management, and maintaining audit logs to meet regulatory standards.
• Payment Initiation Service Providers (PISPs): Use the software to initiate payments on behalf of customers while ensuring compliance with SCA. They depend on the platform to validate user identity, track transaction statuses, and generate compliance reports.
• Card-Based Payment Instrument Issuers (CBPIIs): These providers issue payment cards linked to bank accounts and use PSD2 tools to verify account availability, ensure consented access, and manage secure connectivity with account-holding institutions.
• Founders & CEOs: Use compliance platforms to understand the regulatory landscape and ensure their product roadmap aligns with PSD2 requirements. They often monitor high-level metrics related to API integrations, compliance milestones, and TPP certifications.
• Compliance Managers: Dedicated to keeping the startup on the right side of regulations. They use PSD2 software for real-time alerts on non-compliance issues, managing eIDAS certificates, and submitting documentation to relevant national competent authorities.
• DevOps Engineers: Handle the deployment and maintenance of PSD2-related services. They use compliance tools to manage uptime, monitor API health, and ensure infrastructure meets required security standards.
• Regulatory Auditors: These government or EU agency employees use the compliance software (or request data from it) to perform inspections, assess whether institutions are meeting PSD2 requirements, and impose corrective actions where necessary.
• Policy Analysts: Use aggregated insights from the software to understand trends, monitor implementation challenges, and advise on potential amendments to the regulation based on compliance levels across the sector.
• Regulatory Consultants: Use PSD2 compliance software to advise clients (banks, fintechs, or TPPs) on their obligations. They analyze compliance dashboards, prepare audit reports, and help clients interpret regulatory requirements.
• Legal Advisors: Focused on data privacy, consent, and legal risk. They use or review the output of the software to confirm that data-sharing practices align with PSD2, GDPR, and national laws.
• Operations Managers: Oversee payment operations and use the software to monitor real-time payment flows, ensure transaction compliance, and troubleshoot issues related to authentication or data access.
• Customer Support Teams: Interface with end-users and need access to logs and compliance tools to address customer concerns about failed transactions, denied consents, or API errors under PSD2 constraints.
• Integration Consultants: Help financial institutions connect their systems with PSD2 compliance platforms. They use the software to test integrations, simulate user journeys, and manage technical onboarding processes.
• Managed Service Providers (MSPs): Offer outsourced compliance infrastructure and rely on PSD2 tools to deliver hosted solutions, monitor performance, and ensure SLAs are maintained for clients subject to the directive.
• Retail Consumers: While not direct users of the software, they are the ultimate beneficiaries. Their user experience—such as seamless authentication, secure access to financial data, and smooth third-party payment initiation—is shaped by how well the software operates behind the scenes.
• Small Business Owners: Increasingly use TPP-enabled tools to manage finances and initiate payments. Their interaction with services powered by PSD2 compliance platforms makes them important indirect stakeholders.

How Much Does PSD2 Compliance Software Cost?

The cost of PSD2 compliance software can vary significantly depending on the size of the organization, the complexity of its systems, and the specific features required. For small to medium-sized businesses, prices may range from a few thousand dollars to tens of thousands annually, particularly if the solution includes essential services such as secure customer authentication, API management, and transaction monitoring. Larger financial institutions with more extensive requirements often face higher expenses, as they may need custom integrations, broader security protocols, and ongoing support for evolving regulatory standards.

In addition to the base cost of the software itself, organizations should also consider related expenses such as implementation fees, staff training, infrastructure upgrades, and continuous compliance monitoring. Some solutions are offered as a service, which can help spread out the cost over time but may still require a significant long-term investment. Ultimately, while the upfront and ongoing costs can be substantial, investing in reliable PSD2 compliance software is essential for maintaining regulatory adherence, protecting customer data, and enabling secure open banking practices.

What Software Can Integrate With PSD2 Compliance Software?

PSD2 compliance software can integrate with a wide range of other software systems, particularly those involved in financial services, customer identity verification, and secure data handling. One of the most common types is core banking systems, which manage the day-to-day financial operations and transactions for banks. These systems need to align with PSD2 requirements for secure communication and access to account data.

Another key type is identity and access management software, which helps ensure that the strong customer authentication (SCA) requirements under PSD2 are met. This includes tools for multi-factor authentication, biometrics, and other secure login methods. Payment gateways and processors also integrate with PSD2 compliance tools to ensure that online and mobile payments meet regulatory standards, including transaction authentication and risk assessment.

Customer relationship management (CRM) systems can also connect with PSD2 platforms, especially when handling sensitive customer financial data or managing consent for data sharing. Additionally, APIs provided by fintech companies or banks themselves often serve as bridges, allowing third-party providers like account information services (AISPs) and payment initiation services (PISPs) to securely interact with financial institutions while complying with PSD2 rules.

Data analytics platforms may be integrated to monitor transaction patterns, detect fraud, and ensure ongoing compliance with regulatory reporting requirements. Each of these systems plays a role in creating a secure, user-friendly, and compliant digital banking environment under PSD2.

Trends Related to PSD2 Compliance Software

• Rise of API-First Architectures: PSD2 has catalyzed a shift toward API-first software design, where application programming interfaces are not just an afterthought, but a foundational element of digital banking infrastructure. Compliance platforms now emphasize robust, scalable API frameworks that allow third-party providers (TPPs) to securely access customer account data, initiate payments, and build new financial products.
• Enhanced Focus on Strong Customer Authentication (SCA): A major requirement of PSD2 is the implementation of Strong Customer Authentication, which mandates at least two forms of customer verification. To meet this, compliance software increasingly incorporates multi-factor authentication (MFA), including passwords, device verification, and biometrics like fingerprint or facial recognition.
• Increased Integration with Identity and Access Management (IAM): PSD2 compliance software often integrates deeply with identity and access management (IAM) systems to oversee user identities, roles, and permissions. These integrations ensure that access to sensitive financial data is controlled and auditable.
• AI and Machine Learning for Fraud Detection: To comply with PSD2’s risk management requirements, many platforms are embedding artificial intelligence and machine learning algorithms into their fraud detection systems. These technologies help monitor transaction patterns, analyze user behavior, and detect anomalies that could indicate fraudulent activity.
• Emphasis on Developer Experience: Since PSD2 requires banks to open their systems to external developers, software vendors have prioritized the developer experience. Compliance tools now come with comprehensive SDKs, RESTful APIs, sandbox environments, and interactive documentation to accelerate integration.
• Interoperability and Standardization: To reduce fragmentation in the open banking ecosystem, PSD2 compliance software increasingly adheres to standardized API frameworks such as Berlin Group, STET, or UK Open Banking. These standards ensure consistency across EU member states, enabling TPPs to integrate with multiple banks without significant rework.
• Continuous Monitoring and Audit Readiness: Monitoring tools are now standard features in PSD2 software suites, allowing institutions to continuously track API usage, transaction logs, and user activity. These tools often include dashboards and reporting functions designed to satisfy internal governance and external regulatory audit requirements.
• Modular and Cloud-Native Deployments: A growing number of PSD2 solutions are built using modular, cloud-native architectures, allowing institutions to scale services quickly and adopt only the compliance components they need. This approach reduces infrastructure overhead and enhances resilience, especially in multi-tenant or high-volume environments.
• User Consent Management: Since PSD2 requires explicit user consent for data access and payment initiation, compliance software now includes dedicated modules for managing user consent. These systems record, store, and enable withdrawal of consent at any time, often through user-friendly interfaces.
• Collaboration Between Banks and Fintechs: To accelerate compliance and innovation, traditional banks are increasingly partnering with fintechs and RegTech companies that offer PSD2-as-a-service platforms. These white-labeled solutions help institutions avoid the complexity of building compliance infrastructure from scratch. They also foster the development of open banking ecosystems where banks and third parties can collaborate securely, enabling the creation of new products like aggregated accounts, lending platforms, and personalized financial services.
• Regulatory Technology (RegTech) Advancements: RegTech vendors are playing a pivotal role in PSD2 compliance by offering tools that automate regulatory interpretation, risk assessment, and policy updates. These platforms often include configurable rule engines that adapt to changing legal frameworks and country-specific requirements.
• Data Privacy and GDPR Alignment: PSD2 compliance software must operate within the bounds of GDPR, leading to the development of features that support data protection by design. Many platforms offer capabilities such as encryption at rest and in transit, data minimization, anonymization, and granular access controls.
• Growing Market for White-Label Solutions: Smaller banks and financial institutions with limited technical capacity are turning to white-label PSD2 compliance platforms that offer plug-and-play integration. These solutions bundle all necessary components—including API management, consent handling, SCA, and reporting—into a unified, easy-to-deploy package.
• Open Banking Beyond Compliance: While PSD2 was initially a compliance mandate, it’s increasingly seen as a launchpad for innovation. Many banks are leveraging their PSD2 infrastructure to offer value-added services such as personal finance management (PFM), credit scoring, and financial dashboards.

How To Select the Right PSD2 Compliance Software

Selecting the right PSD2 compliance software requires a thoughtful approach that considers your organization's specific needs, infrastructure, and goals. Start by evaluating the regulatory requirements that apply to your business under PSD2. Determine whether you’re a bank, a third-party provider, or a fintech company, as each role faces different obligations such as strong customer authentication (SCA), secure communication, and access to account information.

Next, look for software solutions that offer comprehensive support for these requirements. The platform should include features like API management, fraud monitoring, consent management, and user authentication mechanisms that align with PSD2 standards. It’s also essential that the software adheres to the latest European Banking Authority (EBA) technical standards and remains updated with any regulatory changes.

Interoperability is another key factor. The software should integrate smoothly with your existing systems, including core banking platforms, customer interfaces, and security infrastructure. Ease of integration can significantly reduce implementation time and operational disruptions.

Security should be a top priority. The right solution must support robust encryption, secure data storage, and strong access controls to protect sensitive customer information and ensure compliance with GDPR alongside PSD2.

Scalability and flexibility are important as well. Choose a solution that can grow with your business and adapt to future regulatory changes or market demands. A modular or cloud-based system can offer more adaptability and efficiency.

Vendor reputation and support services also matter. Evaluate providers based on their experience with PSD2, their track record in financial compliance, and the quality of their customer service. It helps to look at client testimonials, industry certifications, and the availability of technical support during and after deployment.

Lastly, consider the total cost of ownership, including licensing, implementation, training, and ongoing maintenance. A higher upfront investment might be worthwhile if it ensures long-term compliance, fewer updates, and better customer experience.

In short, selecting the right PSD2 compliance software is about aligning technical capabilities with regulatory obligations, business operations, and customer trust—all while planning for the future.

On this page you will find available tools to compare PSD2 compliance software prices, features, integrations and more for you to choose the best software.