Payment initiation services

You can allow a payment initiation service provider to initiate a payment order from your bank account. The payment initiation service provider then asks the bank to execute the payment order on your behalf, and the bank processes the payment order. This service is a new method for making online payments. It is an alternative for e.g. iDEAL, credit card and PayPal payments. Payment initiation services involve a transfer of money from your account.

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What do payment initiation services involve?

Payment initiation services involve initiating a transfer from your bank account online, e.g. when making a purchase at a webshop. Through the payment initiation service provider, you order your bank to transfer an amount to the beneficiary's account.

What happens if I make payments using the new method?

If you make payments using the new method, you order your bank to transfer an amount to the account of the beneficiary (i.e. the shop where you made your purchase) through the payment initiation service provider. The bank then processes the payment order, in cooperation with the beneficiary's bank. The payment initiation service provider informs its customers about the transaction, i.e. you, as the payer, and the beneficiary.

If you want to pay using the new method, the payment initiation service provider needs your consent. Giving consent to a payment initiation service provider to make a payment is very similar to making regular payments through your bank. The payment initiation service provider can follow the same verification procedure as your bank. This always involves the following two steps:

1. Your bank or payment initiation service provider first verifies that you are the account holder by asking for a combination of at least two of the following elements:

  • something you have (e.g. a debit card or a mobile phone),
  • something only you know (access code or password), and
  • biometric identification (e.g. fingerprint, iris scan).

2. Once your identity has been verified, a unique code is generated that is linked to the proposed transaction (amount and beneficiary). The code can only be used for this specific combination of amount and beneficiary. If the amount or beneficiary changes, the code will change too.When entering the code, you give consent to make the payment. You can no longer undo it at this stage.

Why would I want to pay using the new method?

Paying through a payment initiation service provider may be necessary if a webshop requires you to pay this way. It may also be more convenient to pay this way.

Paying through a payment initiation service provider can be an alternative for iDEAL, credit card or PayPal payments. iDEAL for example is not offered throughout Europe. For some webshops, the new method may be the only means by which you can pay for a product.

Besides, one of the aims of PSD2 is to promote innovation. Online service providers may integrate this new payment method in their apps, which can make this an easier way for you to pay.

I need to enter my bank's security details. Is that safe?

PSD2 allows payment initiation service providers to use your bank's checking procedures to verify your identity. For example, to access your bank account online, you must enter certain security details, such as a code or a password. The payment initiation service provider may ask you to enter the same details on its website or in its app. This is one of the main changes that PSD2 entails for you as the account holder.

PSD2 safeguards the security of your payments in several ways. For example, payment initiation service providers must protect the data that you enter and they are not allowed to store it. You are also required to handle your security details with due care. This includes your debit card PIN code. You do not have to give your PIN code to the payment initiation service provider, as they don’t need it.

If you have any doubts about the reliability of the payment initiation service provider, ask for more information. You can ask, for example, if the service provider is a supervised institution, and who the supervisory authority is. For service providers based in the Netherlands, you can check DNB'sregister. If you still have doubts, or if you suspect that the service provider is not who they say they are, then don't enter your details. If possible, pay in another way.

Can a third party ask for my PIN code?

No, third parties are not allowed to ask for your debit card PIN code. They do not need it, and you must keep it secret.

The third party may however ask you to use other security details provided by your bank, such as your internet banking login codes. In some cases you need your bank's debit card, PIN code and security calculator. In that case, you only use the code generated by the security calculator for the third party and not your PIN code.

Can I withdraw my consent for a payment initiation service?

It depends. If you give your consent to a payment initiation service provider, you effectively give an online payment order to your bank. The bank will then process the payment order. You cannot undo this, the same way you cannot undo an iDEAL or debit card payment. For the next payment, you must again give your consent.

If you have given your consent for repeat payments to the same beneficiary, you should contact the payment initiation service provider to withdraw your consent.

I do not trust this new method and I don't want to have anything to do with it. What should I do?

You don't have to use the new payment method, you are not obliged to do so. You don't have to give your consent. Pay using another method.

The new service provider did not process my payment correctly. What should I do?

If the payment is processed without your consent, or if it is processed incorrectly or late, you should first contact your bank. If you did not give your consent, the bank must cancel the payment and deposit the money back into your account. In some cases, the payer may held liable. In this case, a maximum liability of EUR 50 may apply.

If you have a complaint about a payment service provider (e.g. your bank, a payment initiation service provider or an account information service provider), you should contact that service provider. It is best to have a written copy of your complaint. In most cases, you can make a complaint through the payment service provider's website. Otherwise, you can send an email or letter and ask for a written response. You should receive a response within 15 business days. If you do not receive a response, or if you are unhappy about the response, the Financial Services Complaints Board (Klachteninstituut financiële dienstverlening – Kifid) may be able to help you and act as a mediator. Check the Kifidregisterto see if the provider is affiliated to Kifid.

You can also make a complaint to the Dutch Authority for the Financial Markets (AFM). The AFM supervises the conduct of payment institutions and banks towards customers. Contact theFinancial Markets Information Lineor use theContact form. The AFM will not intervene on your behalf. However, it will register your complaint and use it in its inquiries into payment institutions and banks.