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• What Is Data Misuse & How to Prevent It ? (With Examples)

  13 mai 2024, par Erin

  Your data is everywhere. Every time you sign up for an email list, log in to Facebook or download a free app onto your smartphone, your data is being taken.

  This can scare customers and users who fear their data will be misused.

  While data can be a powerful asset for your business, it’s important you manage it well, or you could be in over your head.

  In this guide, we break down what data misuse is, what the different types are, some examples of major data misuse and how you can prevent it so you can grow your brand sustainably.

  What is data misuse ?

  Data is a good thing.

  It helps analysts and marketers understand their customers better so they can serve them relevant information, products and services to improve their lives.

  But it can quickly become a bad thing for both the customers and business owners when it’s mishandled and misused.

  

  Data misuse is when a business uses data outside of the agreed-upon terms. When companies collect data, they need to legally communicate how that data is being used. 

  Who or what determines when data is being misused ?

  Several bodies :

  • User agreements
  • Data privacy laws
  • Corporate policies
  • Industry regulations

  There are certain laws and regulations around how you can collect and use data. Failure to comply with these guidelines and rules can result in several consequences, including legal action.

  Keep reading to discover the different types of data misuse and how to prevent it.

  3 types of data misuse

  There are a few different types of data misuse.

  If you fail to understand them, you could face penalties, legal trouble and a poor brand reputation.

  

  1. Commingling

  When you collect data, you need to ensure you’re using it for the right purpose. Commingling is when an organisation collects data from a specific audience for a specific reason but then uses the data for another purpose.

  One example of commingling is if a company shares sensitive customer data with another company. In many cases, sister companies will share data even if the terms of the data collection didn’t include that clause.

  Another example is if someone collects data for academic purposes like research but then uses the data later on for marketing purposes to drive business growth in a for-profit company.

  In either case, the company went wrong by not being clear on what the data would be used for. You must communicate with your audience exactly how the data will be used.

  2. Personal benefit

  The second common way data is misused in the workplace is through “personal benefit.” This is when someone with access to data abuses it for their own gain.

  The most common example of personal benefit data muse is when an employee misuses internal data.

  While this may sound like each instance of data misuse is caused by malicious intent, that’s not always the case. Data misuse can still exist even if an employee didn’t have any harmful intent behind their actions. 

  One of the most common examples is when an employee mistakenly moves data from a company device to personal devices for easier access.

  3. Ambiguity

  As mentioned above, when discussing commingling, a company must only use data how they say they will use it when they collect it.

  A company can misuse data when they’re unclear on how the data is used. Ambiguity is when a company fails to disclose how user data is being collected and used.

  This means communicating poorly on how the data will be used can be wrong and lead to misuse.

  One of the most common ways this happens is when a company doesn’t know how to use the data, so they can’t give a specific reason. However, this is still considered misuse, as companies need to disclose exactly how they will use the data they collect from their customers.

  Laws on data misuse you need to follow

  Data misuse can lead to poor reputations and penalties from big tech companies. For example, if you step outside social media platforms’ guidelines, you could be suspended, banned or shadowbanned.

  But what’s even more important is certain types of data misuse could mean you’re breaking laws worldwide. Here are some laws on data misuse you need to follow to avoid legal trouble :

  General Data Protection Regulation (GDPR)

  The GDPR, or General Data Protection Regulation, is a law within the European Union (EU) that went into effect in 2018.

  The GDPR was implemented to set a standard and improve data protection in Europe. It was also established to increase accountability and transparency for data breaches within businesses and organisations.

  The purpose of the GDPR is to protect residents within the European Union.

  The penalties for breaking GDPR laws are fines up to 20 million Euros or 4% of global revenues (whatever the higher amount is).

  The GDPR doesn’t just affect companies in Europe. You can break the GDPR’s laws regardless of where your organisation is located worldwide. As long as your company collects, processes or uses the personal data of any EU resident, you’re subject to the GDPR’s rules.

  If you want to track user data to grow your business, you need to ensure you’re following international data laws. Tools like Matomo—the world’s leading privacy-friendly web analytics solution—can help you achieve GDPR compliance and maintain it.

  With Matomo, you can confidently enhance your website’s performance, knowing that you’re adhering to data protection laws. 

  Try Matomo for Free

  Get the web insights you need, without compromising data accuracy.

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  California Consumer Privacy Act (CCPA)

  The California Consumer Privacy Act (CCPA) is another important data law companies worldwide must follow.

  Like GDPR, the CCPA is a data privacy law established to protect residents of a certain region — in this case, residents of California in the United States.

  The CCPA was implemented in 2020, and businesses worldwide can be penalised for breaking the regulations. For example, if you’re found violating the CCPA, you could be fined $7,500 for each intentional violation.

  If you have unintentional violations, you could still be fined, but at a lesser fee of $2,500.

  The Gramm-Leach-Bliley Act (GLBA)

  If your business is located within the United States, then you’re subject to a federal law implemented in 1999 called The Gramm-Leach-Bliley Act (GLB Act or GLBA).

  The GLBA is also known as the Financial Modernization Act of 1999. Its purpose is to control the way American financial institutions handle consumer data. 

  In the GLBA, there are three sections :

  1. The Financial Privacy Rule : regulates the collection and disclosure of private financial data.
  2. Safeguards Rule : Financial institutions must establish security programs to protect financial data.
  3. Pretexting Provisions : Prohibits accessing private data using false pretences.

  The GLBA also requires financial institutions in the U.S. to give their customers written privacy policy communications that explain their data-sharing practices.

  4 examples of data misuse in real life

  If you want to see what data misuse looks like in real life, look no further.

  Big tech is central to some of the biggest data misuses and scandals.

  

  Here are a few examples of data misuse in real life you should take note of to avoid a similar scenario :

  1. Facebook election interference

  One of history’s most famous examples of data misuse is the Facebook and Cambridge Analytica scandal in 2018.

  During the 2018 U.S. midterm elections, Cambridge Analytica, a political consulting firm, acquired personal data from Facebook users that was said to have been collected for academic research.

  Instead, Cambridge Analytica used data from roughly 87 million Facebook users. 

  This is a prime example of commingling.

  The result ? Cambridge Analytica was left bankrupt and dissolved, and Facebook was fined $5 billion by the Federal Trade Commission (FTC).

  2. Uber “God View” tracking

  Another big tech company, Uber, was caught misusing data a decade ago. 

  Why ?

  Uber implemented a new feature for its employees in 2014 called “God View.”

  The tool enabled Uber employees to track riders using their app. The problem was that they were watching them without the users’ permission. “God View” lets Uber spy on their riders to see their movements and locations.

  The FTC ended up slapping them with a major lawsuit, and as part of their settlement agreement, Uber agreed to have an outside firm audit their privacy practices between 2014 and 2034.

  

  3. Twitter targeted ads overstep

  In 2019, Twitter was found guilty of allowing advertisers to access its users’ personal data to improve advertisement targeting.

  Advertisers were given access to user email addresses and phone numbers without explicit permission from the users. The result was that Twitter ad buyers could use this contact information to cross-reference with Twitter’s data to serve ads to them.

  Twitter stated that the data leak was an internal error. 

  4. Google location tracking

  In 2020, Google was found guilty of not explicitly disclosing how it’s using its users’ personal data, which is an example of ambiguity.

  The result ?

  The French data protection authority fined Google $57 million.

  8 ways to prevent data misuse in your company

  Now that you know the dangers of data misuse and its associated penalties, it’s time to understand how you can prevent it in your company.

  

  Here are eight ways you can prevent data misuse :

  1. Track data with an ethical web analytics solution

  You can’t get by in today’s business world without tracking data. The question is whether you’re tracking it safely or not.

  If you want to ensure you aren’t getting into legal trouble with data misuse, then you need to use an ethical web analytics solution like Matomo.

  With it, you can track and improve your website performance while remaining GDPR-compliant and respecting user privacy. Unlike other web analytics solutions that monetise your data and auction it off to advertisers, with Matomo, you own your data.

  Try Matomo for Free

  Get the web insights you need, without compromising data accuracy.

  Start for free

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  2. Don’t share data with big tech

  As the data misuse examples above show, big tech companies often violate data privacy laws.

  And while most of these companies, like Google, appear to be convenient, they’re often inconvenient (and much worse), especially regarding data leaks, privacy breaches and the sale of your data to advertisers.

  Have you ever heard the phrase : “You are the product ?” When it comes to big tech, chances are if you’re getting it for free, you (and your data) are the products they’re selling.

  The best way to stop sharing data with big tech is to stop using platforms like Google. For more ideas on different Google product alternatives, check out this list of Google alternatives.

  3. Identity verification 

  Data misuse typically isn’t a company-wide ploy. Often, it’s the lack of security structure and systems within your company. 

  An important place to start is to ensure proper identity verification for anyone with access to your data.

  4. Access management

  After establishing identity verification, you should ensure you have proper access management set up. For example, you should only give specific access to specific roles in your company to prevent data misuse.

  5. Activity logs and monitoring

  One way to track data misuse or breaches is by setting up activity logs to ensure you can see who is accessing certain types of data and when they’re accessing it.

  You should ensure you have a team dedicated to continuously monitoring these logs to catch anything quickly.

  6. Behaviour alerts 

  While manually monitoring data is important, it’s also good to set up automatic alerts if there is unusual activity around your data centres. You should set up behaviour alerts and notifications in case threats or compromising events occur.

  7. Onboarding, training, education

  One way to ensure quality data management is to keep your employees up to speed on data security. You should ensure data security is a part of your employee onboarding. Also, you should have regular training and education to keep people informed on protecting company and customer data.

  8. Create data protocols and processes 

  To ensure long-term data security, you should establish data protocols and processes. 

  To protect your user data, set up rules and systems within your organisation that people can reference and follow continuously to prevent data misuse.

  Leverage data ethically with Matomo

  Data is everything in business.

  But it’s not something to be taken lightly. Mishandling user data can break customer trust, lead to penalties from organisations and even create legal trouble and massive fines.

  You should only use privacy-first tools to ensure you’re handling data responsibly.

  Matomo is a privacy-friendly web analytics tool that collects, stores and tracks data across your website without breaking privacy laws.

  With over 1 million websites using Matomo, you can track and improve website performance with :

  • Accurate data (no data sampling)
  • Privacy-friendly and compliant with privacy regulations like GDPR, CCPA and more
  • Advanced features like heatmaps, session recordings, A/B testing and more

  Try Matomo free for 21-days. No credit card required.

  Try Matomo for Free

  21 day free trial. No credit card required.

  
  

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• A Guide to Ethical Web Analytics in 2024

  17 juin 2024, par Erin

  User data is more valuable and sought after than ever. 

  Ninety-four percent of respondents in Cisco’s Data Privacy Benchmark Study said their customers wouldn’t buy from them if their data weren’t protected, with 95% saying privacy was a business imperative. 

  Unfortunately, the data collection practices of most businesses are far from acceptable and often put their customers’ privacy at risk. 

  But it doesn’t have to be this way. You can ethically collect valuable and insightful customer data—you just need the right tools.

  In this article, we show you what an ethical web analytics solution can look like, why Google Analytics is a problem and how you can collect data without risking your customers’ privacy.

  What is ethical web analytics ?

  Ethical web analytics put user privacy first. These platforms prioritise privacy and transparency by only collecting necessary data, avoiding implicit user identification and openly communicating data practices and tracking methods. 

  Ethical tools adhere to data protection laws like GDPR as standard (meaning businesses using these tools never have to worry about fines or disruptions). In other words, ethical web analytics refrain from exploiting and profiting from user behaviour and data. 

  Unfortunately, most traditional data solutions collect as much data as possible without users’ knowledge or consent.

  Why does digital privacy matter ?

  Digital privacy matters because companies have repeatedly proven they will collect and use data for financial gain. It also presents security risks. Unsecured user data can lead to identity theft, cyberattacks and harassment. 

  Big tech companies like Google and Meta are often to blame for all this. These companies collect millions of user data points — like age, gender, income, political beliefs and location. Worse still, they share this information with interested third parties.

  After public outrage over data breaches and other privacy scandals, consumers are taking active steps to disallow tracking where possible. IAPP’s Privacy and Consumer Trust Report finds that 68% of consumers across 19 countries are somewhat or very concerned about their digital privacy. 

  There’s no way around it : companies of all sizes and shapes need to consider how they handle and protect customers’ private information. 

  Why should you use an ethical web analytics tool ?

  When companies use ethical web analytics tools they can build customer trust, boost their brand reputation, improve data security practices and future proof their website tracking solution. 

  Boost brand reputation

  The fallout from a data privacy scandal can be severe. 

  Just look at what happened to Facebook during the Cambridge Analytica data scandal. The eponymous consulting firm harvested 50 million Facebook profiles and used that information to target people with political messages. Due to the instant public backlash, Facebook’s stock tanked, and use of the “delete Facebook” hashtag increased by 423% in the following days.

  That’s because consumers care about data privacy, according to Deloitte’s Connected Consumer Study :

  • Almost 90 percent agree they should be able to view and delete data companies collect 
  • 77 percent want the government to introduce stricter regulations
  • Half feel the benefits they get from online services outweigh data privacy concerns.

  If you can prove you buck the trend by collecting data using ethical methods, it can boost your brand’s reputation. 

  Build trust with customers

  At the same time, collecting data in an ethical way can help you build customer trust. You’ll go a long way to changing consumer perceptions, too. Almost half of consumers don’t like sharing data, and 57% believe companies sell their data. 

  This additional trust should generate a positive ROI for your business. According to Cisco’s Data Privacy Benchmark Study, the average company gains $180 for every $100 they invest in privacy. 

  Improve data security

  According to IBM’s Cost of a Data Breach report, the average cost of a data breach is nearly $4.5 million. This kind of scenario becomes much less likely when you use an ethical tool that collects less data overall and anonymises the data you do collect. 

  Futureproof your web analytics solution

  The obvious risk of not complying with privacy regulations is a fine — which can be up to €20 million, or 4% of worldwide annual revenue in the case of GDPR.

  It’s not just fines and penalties you risk if you fail to comply with privacy regulations like GDPR. For some companies, especially larger ones, the biggest risk of non-compliance with privacy regulations is the potential sudden need to abandon Google Analytics and switch to an ethical alternative.

  If Data Protection Authorities ban Google Analytics again, as has happened in Austria, France, and other countries, businesses will be forced to drop everything and make an immediate transition to a compliant web analytics solution.

  When an organisation’s entire marketing operation relies on data, migrating to a new solution can be incredibly painful and time-consuming. So, the sooner you switch to an ethical tool, the less of a headache the process will be. 

  The problem with Google Analytics

  Google Analytics (GA) is the most popular analytics platform in the world, but it’s a world away from being an ethical tool. Here’s why :

  You don’t have data ownership

  Google Analytics is attractive to businesses of all sizes because of its price. Everyone loves getting something for free, but there’s still a cost — your and your customers’ data.

  That’s because Google combines the data you collect with information from the millions of other websites it tracks to inform its advertising efforts. It may also use your data to train large language models like Gemini. 

  It has a rocky history with GDPR laws

  Google and EU regulators haven’t always got along. For example, the German Data Protection Authority is investigating 200,000 pending cases against websites using GA. The platform has also been banned and added back to the EU-US Data Privacy Framework several times over the past few years. 

  You can use GA to collect data about EU customers right now, but there’s no guarantee you’ll be able to do so in the future. 

  It requires a specific setup to remain compliant

  While you can currently use GA in a GDPR-compliant way — owing to its inclusion in the EU-US Data Privacy Framework — you have to set it up in a very specific way. That’s because the platform’s compliance depends on what data you collect, how you inform users and the level of consent you acquire. You’ll still need to include an extensive privacy policy on your website. 

  What does ethical web analytics look like ?

  An ethical web analytics solution should put user privacy first, ensure compliance with regulations like GDPR, give businesses 100% control of the data they collect and be completely transparent about data collection and storage practices. 

  

  100% data ownership

  You don’t fully control customer data when you use Google Analytics. The search giant uses your data for its own advertising purposes and may also use it to train large language models like Gemini. 

  When you choose an ethical web analytics alternative like Matomo, you can ensure you completely own your data.

  Try Matomo for Free

  Get the web insights you need, without compromising data accuracy.

  Start for free

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  Respects user privacy

  It’s possible to track and measure user behaviour without collecting personally identifiable information (PII). Just look at the ethical web analytics tools we’ve reviewed below. 

  These platforms respect user privacy and conform to strict privacy regulations like GDPR, CCPA and HIPAA by incorporating some or all of the following features :

  • Opt-out mechanisms to let users refuse tracking
  • IP addresses anonymisation and other data anonymisation techniques
  • DoNotTrack options
  • Shorter expiration dates for tracking cookies

  In Matomo’s case, it’s all of the above. Better still, you can check our privacy credentials yourself. Our software’s source code is open source on GitHub and accessible to anyone at any time. 

  Compliant with government regulations

  While Google’s history with data regulations is tumultuous, an ethical web analytics platform should follow even the strictest privacy laws, including GDPR, HIPAA, CCPA, LGPD and PECR.

  But why stop there ? Matomo has been approved by the French Data Protection Authority (CNIL) as one of the few web analytics tools that French sites can use to collect data without tracking consent. So you don’t need an annoying consent banner popping up on your website anymore. 

  Try Matomo for Free

  Get the web insights you need, without compromising data accuracy.

  Start for free

  No credit card required

  Complete transparency 

  Ethical web analytics tools will be upfront about their data collection practices, whether that’s in the U.S., EU, or on your own private servers. Look for a solution that refrains from collecting personally identifiable information, shows where data is stored, and lets you alter tracking methods to increase privacy even further. 

  Some solutions, like Matomo, will increase transparency further by providing open source software. Anyone can find our source code on GitHub to see exactly how our platform tracks and stores user data. This means our code is regularly examined and reviewed by a community of developers, making it more secure, too.

  Ethical web analytics solutions

  There are several options for an ethical web analytics tool. We list three of the best providers below. 

  Matomo

  Matomo is an open source web analytics tool and privacy-focused Google Analytics alternative used by over one million sites globally. 

  

  Matomo is fully compliant with prominent global privacy regulations like GDPR, CCPA and HIPAA, meaning you never have to worry about collecting consent when tracking user behaviour. 

  The data you collect is completely accurate since Matomo doesn’t use data sampling and is 100% yours. We don’t share data with third parties but can prove it. Our product source code is publicly available on GitHub. As a community-led project, you can download and install it yourself for free. 

  With Matomo, you get a full range of web analytics capabilities and behavioural analytics. That includes your standard metrics (think visitors, traffic sources, bounce rates, etc.), advanced features to analyse user behaviour like A/B Testing, Form Analytics, Heatmaps and Session Recordings. 

  Migrating to Matomo is easy. You can even import historical Google Analytics data to generate meaningful insights immediately. 

  Try Matomo for Free

  Get the web insights you need, without compromising data accuracy.

  Start for free

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  Fathom

  Fathom Analytics is a lightweight privacy-focused analytics solution that launched in 2018. It aims to be an easy-to-use Google Analytics alternative that doesn’t compromise privacy. 

  

  Like Matomo, Fathom complies with all major privacy regulations, including GDPR and CCPA. It also provides 100% accurate, unsampled reports and doesn’t share your data with third parties. 

  While Fathom provides fairly comprehensive analytics reports, it doesn’t have some of Matomo’s more advanced features. That includes e-commerce tracking, heatmaps, session recordings, and more. 

  Plausible

  Plausible Analytics is another open source Google Analytics alternative that was built and hosted in the EU. 

  

  Launched in 2019, Plausible is a newer player in the privacy-focused analytics market. Still, its ultra-lightweight script makes it an attractive option for organisations that prioritise speed over everything else. 

  Like Matomo and Fathom, Plausible is GDPR and CCPA-compliant by design. Nor is there any cap on the amount of data you collect or any debate over whether the data is accurate (Plausible doesn’t use data sampling) or who owns the data (you do). 

  Matomo makes it easy to migrate to an ethical web analytics alternative

  There’s no reason to put your users’ privacy at risk, especially when there are so many benefits to choosing an ethical tool. Whether you want to avoid fines, build trust with your customers, or simply know you’re doing the right thing, choosing a privacy-focused, ethical solution like Matomo is taking a massive step in the right direction. 

  Making the switch is easy, too. Matomo is one of the few options that lets you import historical Google Analytics data, so starting from scratch is unnecessary. 

  Get started today by trying Matomo for free for 21-days. No credit card required. 

  Try Matomo for Free

  21 day free trial. No credit card required.

  
  

  Your email address
  

  Your website address
  

  Your Analytics subdomain will be .matomo.cloud (change)

  Choose your analytics subdomain
  

  .matomo.cloud

  I accept the terms and conditions and data processing agreement (DPA)

  
  Your information will be used to create an account on our cloud service. For more information please consult our privacy policy.
  
  
  

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• A Quick Start Guide to the Payment Services Directive (PSD2)

  22 novembre 2024, par Daniel Crough — Banking and Financial Services, Privacy

  In 2023, there were 266.2 billion real-time payments indicating that the demand for secure transactions has never been higher. As we move towards a more open banking system, there are a host of new payment solutions that offer convenience and efficiency, but they also present new risks.

  The Payment Services Directive 2 (PSD2) is one of many regulations established to address these concerns. PSD2 is a European Union (EU) business initiative to offer smooth payment experiences while helping customers feel safe from online threats. 

  In this post, learn what PSD2 includes, how it improves security for online payments, and how Matomo supports banks and financial institutions with PSD2 compliance.

  What is PSD2 ? 

  PSD2 is an EU directive that aims to improve the security of electronic payments across the EU. It enforces strong customer authentication and allows third-party access to consumer accounts with explicit consent. 

  Its main objectives are :

  • Strengthening security and data privacy measures around digital payments.
  • Encouraging innovation by allowing third-party providers access to banking data.
  • Improving transparency with clear communication regarding fees, terms and conditions associated with payment services.
  • Establishing a framework for sharing customer data securely through APIs for PSD2 open banking.

  Rationale behind PSD2 

  PSD2’s primary purpose is to engineer a more integrated and efficient European payment market without compromising the security of online transactions. 

  The original directive aimed to standardise payment services across EU member states, but as technology evolved, an updated version was needed.

  PSD2 is mandatory for various entities within the European Economic Area (EEA), like :

  • Banks and credit institutions
  • Electronic money institutions or digital banks like Revolut
  • Card issuing and acquiring institutions
  • Fintech companies
  • Multi-national organisations operating in the EU

  PSD2 implementation timeline

  With several important milestones, PSD2 has reshaped how payment services work in Europe. Here’s a closer look at the pivotal events that paved the way for its launch.

  • 2002 : The banking industry creates the European Payments Council (EC), which drives the Single Euro Payments Area (SEPA) initiative to include non-cash payment instruments across European regions. 
  • 2007 : PSD1 goes into effect.
  • 2013 : EC proposes PSD2 to include protocols for upcoming payment services.
  • 2015 : The Council of European Union passes PSD2 and gives member states two years to incorporate it.
  • 2018 : PSD2 goes into effect. 
  • 2019 : The final deadline for all companies within the EU to comply with PSD2’s regulations and rules for strong customer authentication. 

  PSD2 : Key components 

  PSD2 introduces several key components. Let’s take a look at each one.

  Strong Customer Authentication (SCA)

  The Regulatory Technical Standards (RTS) under PSD2 outline specific requirements for SCA. 

  SCA requires multi-factor authentication for online transactions. When customers make a payment online, they need to verify their identity using at least two of the three following elements :

  • Knowledge : Something they know (like a password, a code or a secret answer)
  • Possession : Something they have (like their phone or card)
  • Inherence : Something they are (like biometrics — fingerprints or facial features)

  

  Before SCA, banks verified an individual’s identity only using a password. This dual verification allows only authorised users to complete transactions. SCA implementation reduces fraud and increases the security of electronic payments.

  SCA implementation varies for different payment methods. Debit and credit cards use the 3D Secure (3DS) protocol. E-wallets and other local payment measures often have their own SCA-compliant steps. 

  3DS is an extra step to authenticate a customer’s identity. Most European debit and credit card companies implement it. Also, in case of fraudulent chargebacks, the issuing bank becomes liable due to 3DS, not the business. 

  However, in SCA, certain transactions are exempt : 

  • Low-risk transactions : A transaction by an issuer or an acquirer whose fraud level is below a specific threshold. If the acquirer feels that a transaction is low risk, they can request to skip SCA. 
  • Low-value transactions : Transactions under €30.
  • Trusted beneficiaries : Trusted merchants customers choose to safelist.
  • Recurring payments : Recurring transactions for a fixed amount are exempt from SCA after the first transaction.

  Third-party payment service providers (TPPs) framework

  TPPs are entities authorised to access customer banking data and initiate payments. There are three types of TPPs :

  Account Information Service Providers (AISPs)

  AISPs are services that can view customers’ account details, but only with their permission. For example, a budgeting app might use AISP services to gather transaction data from a user’s bank account, helping them monitor expenses and oversee finances. 

  Payment Initiation Service Providers (PISPs)

  PISPs enable clients to initiate payments directly from their bank accounts, bypassing the need for conventional payment options such as debit or credit cards. After the customer makes a payment, PISPs immediately contact the merchant to ensure the user can access the online services or products they bought. 

  Card-Based Payment Instruments (CBPII)

  CBPIIs refer to services that issue payment cards linked to customer accounts. 

  Requirements for TPPs

  To operate effectively under PSD2, TPPs must meet several requirements :

  Consumer consent : Customers must explicitly authorise TPPs to retrieve their financial data. This way, users can control who can view their information and for what purpose.

  Security compliance : TPPs must follow SCA and secure communication guidelines to protect users from fraud and unauthorised access.

  API availability : Banks must make their Application Programming Interfaces (APIs) accessible and allow TPPs to connect securely with the bank’s systems. This availability helps in easy integration and lets TPPs access essential data. 

  Consumer protection methods

  PSD2 implements various consumer protection measures to increase trust and transparency between consumers and financial institutions. Here’s a closer look at some of these key methods :

  • Prohibition of unjustified fees : PSD2 requires banks to clearly communicate any additional charges or fees for international transfers or account maintenance. This ensures consumers are fully aware of the actual costs and charges.
  • Timely complaint resolution : PSD2 mandates that payment service providers (PSPs) have a straightforward complaint procedure. If a customer faces any problems, the provider must respond within 15 business days. This requirement encourages consumers to engage more confidently with financial services.
  • Refund in case of unauthorised payment : Customers are entitled to a full refund for payments made without their consent.
  • Surcharge ban : Additional charges on credit and debit card payments aren’t allowed. Businesses can’t impose extra fees on these payment methods, which increases customers’ purchasing power.

  Benefits of PSD2 

  Businesses — particularly those in banking, fintech, finserv, etc. — stand to benefit from PSD2 in several ways.

  Access to customer data

  With customer consent, banks can analyse spending patterns to develop tailored financial products that match customer needs, from personalised savings accounts to more relevant loan offerings.

  Innovation and cost benefits 

  PSD2 opened payment processing up to more market competition. New payment companies bring fresh approaches to banking services, making daily transactions more efficient while driving down processing fees across the sector.

  Also, banks now work alongside payment technology providers, combining their strengths to create better services. This collaboration brings faster payment options to businesses, helping them stay competitive while reducing operational costs.

  Improved customer trust and experience

  Due to PSD2 guidelines, modern systems handle transactions quickly without compromising the safety of payment data, creating a balanced approach to digital banking.

  

  Banking customers now have more control over their financial information. Clear processes allow consumers to view and adjust their financial preferences as needed.

  Strong security standards form the foundation of these new payment systems. Payment provider platforms must adhere to strict regulations and implement additional protection measures.

  Challenges in PSD2 compliance 

  What challenges can banks and financial institutions face regarding PSD2 compliance ? Let’s examine them. 

  Resource requirements

  For many businesses, the new requirements come with a high price tag. PSD2 requires banks and fintechs to build and update their systems so that other providers can access customer data safely. For example, they must develop APIs to allow TPPs to acquire customer data. 

  Many banks still use older systems that can’t meet PSD2’s added requirements. In addition to the cost of upgrades, complying with PSD2 requires banks to devote resources to training staff and monitoring compliance.

  The significant costs required to update legacy systems and IT infrastructure while keeping services running remain challenging.

  Risks and penalties

  Organisations that fail to comply with PSD2 regulations can face significant penalties.

  Additionally, the overlapping requirements of PSD2 and other regulations, such as the General Data Protection Regulation (GDPR), can create confusion. 

  Banks need clear agreements with TPPs about who’s responsible when things go wrong. This includes handling data breaches, preventing data misuse and protecting customer information. 

  Increased competition 

  Introducing new players in the financial ecosystem, such as AISPs and PISPs, creates competition. Banks must adapt their services to stay competitive while managing compliance costs.

  PSD2 aims to protect customers but the stronger authentication requirements can make banking less convenient. Banks must balance security with user experience. Focused time, effort and continuous monitoring are needed for businesses to stay compliant and competitive.

  How Matomo can help 

  Matomo gives banks and financial institutions complete control over their data through privacy-focused web analytics, keeping collected information internal rather than being used for marketing or other purposes. 

  Its advanced security setup includes access controls, audit logs, SSL encryption, single sign-on and two-factor authentication. This creates a secure environment where sensitive data remains accessible only to authorised staff.

  While prioritizing privacy, Matomo provides tools to understand user flow and customer segments, such as session recordings, heatmaps and A/B testing.

  Financial institutions particularly benefit from several key features : 

  • Tools for obtaining explicit consent before processing personal data like this Do Not Track preference
  • Insights into how financial institutions integrate TPPs (including API usage, user engagement and potential authentication drop-off points)
  • Tracking of failed login attempts or unusual access patterns
  • IP anonymization to analyse traffic patterns and detect potential fraud

  

  PSD3 : The next step 

  In recent years, we have seen the rise of innovative payment companies and increasingly clever fraud schemes. This has prompted regulators to propose updates to payment rules.

  PSD3’s scope is to adapt to the evolving digital transformation and to better handle these fraud risks. The proposed measures : 

  • Encourage PSPs to share fraud-related information.
  • Make customers aware of the different types of fraud.
  • Strengthen customer authentication standards.
  • Provide non-bank PSPs restricted access to EU payment systems. 
  • Enact payment rules in a directly applicable regulation and harmonise and enforce the directive.

  Web analytics that respect user privacy 

  Achieving compliance with PSD2 may be a long road for some businesses. With Matomo, organisations can enjoy peace of mind knowing their data practices align with legal requirements.

  Ready to stop worrying over compliance with regulations like PSD2 and take control of your data ? Start your 21-day free trial with Matomo.