The fintech industry is cooking up a storm. According to Statista Market Insights, the global revenue of the fintech sector shall grow further in the coming years, probably going beyond 141.18 billion U.S. dollars in 2028. However, one thing that acts as a bottleneck is regulatory compliance. The Revised Payment Services Directive (PSD2) lays down stringent security and transparency guidelines for financial applications in the European Union; non-compliance can attract a fine of up to €20 million or 4% of the entity’s annual turnover. For fintechs, compliance down the line means simply developing valid apps. How can MERN stack (MongoDB, Express.js, React, Node.js) help simplify this development process?

How the solid architecture of MERN stack helps fintech applications to accomplish PSD2 compliance naturally. Whether startup or enterprise, application of MERN stack speeds up your compliance journey along with assurance on scalability and security.

Understanding PSD2 Compliance

Payment Services Directive No. 2 for financial undertakings with service lines getting to transpose the new European Union regimes better into their local regulations. PSD2 essentially offers a platform for continuing competition and innovation. Finally, securing provisions for market neutrality, customers would be able to develop their online banking services based on fintech applications. Starting with significant provisions under the Monetary Services Directive II (MDI), some track the following areas under SCA-based transactions.

• Strong Customer Authentication (SCA): Payouts are validated via at least two from the aforementioned three elements: something the user knows (password), something the user has (mobile device), or something the user has (biometric data).


• Open Banking: Thereby building innovation and competition through the supply of third-party access to bank data, upon consent from the customer.


• Enhanced Security: An enhancement to ensure the protection of classified information from frauds.


• Interoperability: That all the financial systems are able to work with each other very much easily.

How the MERN Stack Helps Achieve PSD2 Compliance?

All the components of the MERN stack are supportive by intrinsically favoring the building of applications compliant with PSD2:

MongoDB: Secure Data Management

• Encryption-at-Rest: MongoDB’s field-level encryption keeps sensitive information such as payment details unreadable unless the decryption keys are used, thereby following PSD2’s data protection mandates.


• GDPR Compliance: Built-in auditing tools track data access, simplifying compliance reporting.

Express.js: Robust Middleware for Authentication

• SCA Implementation: Integrating the multiple authentication factors (by OAuth2, biometrics, etc.) in APIs is made easier through Express middleware.


• Rate Limiting: It prevents so-called bruteforce login attempts.
  
  Read More :- https://megamindstechnologies.com/blog/how-mern-stack-facilitates-psd2-compliance-for-fintech-apps/