PSD2 is a regulation implemented by the European Union to enhance the protection of customers' financial data and promote innovation and competition in the payment services industry. It requires banks to open up their payment infrastructure and customer data to third-party providers through APIs, allowing customers to grant access to their accounts to initiate payments and receive financial advice from non-banking institutions. PSD2 aims to create a more open and connected financial ecosystem, enabling consumers to access a wider range of payment services and fostering innovation in the European payments market.
"The Payment Services Directive 2(PSD2) is an EU Directive that sets requirements for firms that provide payment services and will affect banks and building societies, payment institutions, e-money institutions, and their customers" (Source, FCA).
The objective of PSD2 is to increase consumer protection, make payments more secure, and payment services more accessible. You can find more information about payment services via the FCA website here.