The Payment Accounts Directive is a European Union rule that gives you the right to open a basic bank account and switch banks more easily

The Payment Accounts Directive (also called PSD2 in its second version) is a set of EU rules that protect you when you use bank accounts and make payments. It does three main things: it lets you open a basic bank account even if banks have refused you before, it makes switching banks simpler by requiring your old bank to help move your money, and it sets rules about what banks can charge you and how they must keep your information safe.

If you live in the European Union or use a bank account there, this directive affects you whether you know it or not. It changed how banks operate and what rights you have when something goes wrong with a payment or your account access.

Key Takeaways

  • The Payment Accounts Directive guarantees you the right to a basic bank account with essential services, even if other banks have turned you down.
  • Banks must help you switch accounts by moving your money and redirecting payments automatically, which used to be difficult and slow.
  • The directive sets limits on what banks can charge for basic services and requires them to tell you clearly what fees explore.
  • Your bank must follow strict rules about protecting your payment information and must tell you within two business days if a payment fails.

Your right to a basic bank account

Under the Payment Accounts Directive, every bank in the EU must offer a basic payment account to anyone who asks for one. This is not a special account for poor people — it is a legal requirement. The account must include a debit card, the ability to receive money, and the ability to make payments by bank transfer or standing order.

You cannot be refused a basic account just because you have had money problems in the past, you are unemployed, or you have a poor credit history. Banks can still refuse you if you have committed fraud, if you are already banned from banking in that country, or if you pose a genuine money-laundering risk — but these are the only reasons. If a bank refuses you, it must tell you why in writing within ten business days.

The basic account does not include overdrafts, credit, or investment services. It is designed to let you receive your salary, pay bills, and access your money. Many people use it as a stepping stone to a full account once their situation improves.

Switching banks without losing your payments

Before the Payment Accounts Directive, switching banks meant risking missed payments because your old bank would not tell your new bank which payments were coming in. Now, your old bank must help you switch by providing a list of all regular payments and standing orders, and your new bank must set them up for you automatically.

The process works like this: you tell your new bank you want to switch, and they give you a switching service form. You sign it and give it to your new bank. Your new bank then contacts your old bank and asks for a list of your regular payments. Your old bank must provide this within four business days. Your new bank then sets up those payments at the new bank and tells your old bank to cancel them — all within twelve business days of you signing the form.

During this time, your old bank must keep your account open and working. If a payment comes in that was meant for your old account, the old bank must forward it to your new account. This protection lasts for thirteen months after you switch.

What banks must tell you about fees and charges

The Payment Accounts Directive requires banks to be clear and upfront about what they charge. For a basic account, banks can charge fees, but they must publish a fee schedule that shows every charge in plain language. You must be able to see this before you open the account.

Banks must also give you a standardised information sheet that compares their basic account to other banks' basic accounts. This sheet uses the same format across all EU banks, so you can compare one bank to another without confusion. The sheet shows things like monthly fees, charges for transfers, charges for card use, and charges if you go overdrawn.

If your bank changes its fees, it must tell you at least two months in advance. You then have the right to close your account without penalty if you do not want to accept the new fees.

How your payment information is protected

The Payment Accounts Directive includes strict rules about how banks must protect your data when you make payments. Banks must use strong authentication — this usually means two-factor authentication, like a password plus a code sent to your phone — when you log in or make a large payment.

Banks must also tell you when ready if they suspect fraud on your account. If someone makes an unauthorized payment from your account, the bank must refund you within ten business days unless they have evidence that you authorized it or that you were grossly negligent (for example, you wrote your PIN on your card).

If a payment you make fails — for instance, the money does not reach the person you sent it to — your bank must tell you why within two business days. If it was the bank's fault, they must refund you the full amount plus any charges you paid.

What happens if your bank breaks these rules

If your bank refuses to give you a basic account without a legal reason, or if they refuse to help you switch, or if they do not refund you for an unauthorized payment, you have the right to complain. First, complain to the bank in writing. They must respond within eight weeks.

If the bank does not fix the problem, you can take your complaint to your country's financial ombudsman or dispute resolution service. This is a free, independent body that can order the bank to pay you compensation. You do not need a lawyer, and you do not pay a fee.

Different EU countries have different ombudsman services — for example, the UK has the Financial Ombudsman Service, France has the Médiateur de l'Autorité de contrôle prudentiel et de résolution, and Germany has the Ombudsman of the German Banking Association. Your bank must tell you how to contact yours.

How the Payment Accounts Directive affects online and mobile payments

The Payment Accounts Directive also covers payments you make through your phone or online. Banks must use strong authentication for these payments too, especially if the amount is large or unusual for your account. This is why you often get a text message or app notification asking you to confirm a payment — that is the directive in action.

If you use a payment service like PayPal or Wise, the directive applies to them as well. They must follow the same rules about protecting your data, refunding unauthorized payments, and telling you when something goes wrong. However, some smaller services may have different rules depending on which EU country they operate in.

The directive also gives you the right to use open banking services. This means you can give a third-party app permission to see your bank balance or make payments on your behalf, but only if you explicitly agree to it. Your bank cannot refuse to let you use these services, and they cannot charge you extra for it.

Frequently Asked Questions

Can a bank charge me for opening a basic account?

No. Banks can charge monthly fees for using a basic account, but they cannot charge you to open one. They must show you all fees upfront before you open the account, and you can compare fees between banks using the standardised information sheet.

What if I am not in the EU — does this directive explore to me?

The Payment Accounts Directive only applies in EU member states and countries that have adopted it. If you live outside the EU, your bank account rights depend on your country's own laws. However, if you have a bank account in an EU country, the directive protects you.

How long does it take to switch banks under this directive?

The switch must be completed within twelve business days of you signing the switching form. Your old bank must keep your account open for thirteen months after the switch to catch any payments that were meant for the old account.

What should I do if my bank refuses to refund an unauthorized payment?

Write to your bank and explain why you believe the payment was unauthorized. Give them eight weeks to respond. If they refuse or do not respond, contact your country's financial ombudsman or dispute resolution service — this is free and does not require a lawyer.

Can my bank refuse to let me switch to another bank?

No. Your bank must help you switch by providing your payment information and cancelling your standing orders. If they refuse, you can complain to your financial regulator or ombudsman. However, they can refuse to switch if you owe them money or if there is a court order against your account.