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PSD3: the European Commission’s response to market evolution

The payment services market has evolved significantly in recent years, with the number of electronic payments in the European Union continually increasing. New providers have emerged thanks to digital technologies, and have entered the market, offering open banking services. To support this trend, the European Commission is planning the launch of PSD3.


Revision of the Payment Services Directive: from PSD2 to PSD3

Adopted in 2015 and implemented since September 2019, PSD2 aimed to establish a legal framework for the development of open banking. It also helped harmonize regulations in the European payment market and strengthen consumer security. While the directive has enabled the development of open banking, its success has been mixed: Fintechs have developed but remain dependent on traditional banking sector players and their underperforming APIs (Application Programming Interfaces). Additionally, increasingly sophisticated fraud techniques endanger consumers. The European Commission thus intends to modify and modernize the current directive, which will become PSD3. The main goal is to further develop open banking while enhancing consumer protection.

Commission européenne

What does the new PSD3 directive include?

The changes and new measures of PSD3 primarily aim to:

1. Increase security and consumer protection

The new directive aims to allow consumers to continue making their payments and electronic transactions securely within the European Union.
Some measures of PSD3 aim to combat and mitigate the intensified payment fraud of recent years, such as:

  • Making it mandatory to verify that the IBAN number of the beneficiary matches the name on the account for all transfers,
  • Allowing payment service providers to share information about fraud among themselves,
  • Extending the refund rights for consumers who are victims of fraud,
  • Strengthening authentication rules on banks’ websites,
  • Improving the transparency of account statements and providing clearer information about the management fees of ATMs,
  • Raising greater consumer awareness.

2. Promote open banking

Open banking, which refers to the secure sharing and exchange of financial data with banks and fintech companies, has significantly increased in recent years.
Several measures are still considered to further develop open banking:

  • Enhancing the quality of APIs: banks should provide a dedicated API with standardized communication features; they must commit to regularly publish on their website the statistics of availability and performance, and to notify technical changes three months in advance;
  • As part of standardizing competitive conditions, regulators also require banks to provide an explanation to payment service providers for each denial of account access;
  • To ensure compliance with the new regulations, national authorities like the PRA (Prudential Regulation Authority) should have expanded supervisory and sanctioning powers.

Schedule and implementation of PSD3

The texts on PSD3 should be adopted before summer 2024, for effective implementation by the end of 2025. However, the schedule for implementing the directive may be extended since it must be enacted across the different member states of SEPA.

We closely follow the measures that will be adopted in PSD3 to make developments in the Cegid Exabanque software, thus ensuring compliance with this new regulatory context and offering a solution that remains at the forefront of market developments!


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