The European Commission (EC) has announced plans to overhaul the Payments Services Directive (PSD) to its next phase, ‘PSD3’, which aims to further embed payment regulation into the ever-evolving digital age.
Cited by the rapid accelerating adoption of electronic payments – reaching a value of €240 trillion in 2021, after effects of the COVID-19 pandemic, and new digital technology services such as Open Banking as means for the switch to PSD3.
The revision of PSD2 brought many considerations for the Commission to mull over, such as how to ensure the EU’s financial sector is “fit for purpose”, enhancing the barriers for protecting customers from risks such as fraud, and adapting to new technologies.
Below is a list of the proposals the EC wishes to introduce in PSD3:
- Combatting and mitigating payment fraud, by enabling payment service providers to share fraud-related information between themselves, increasing consumers’ awareness, strengthening customer authentication rules, extending refund rights of consumers who fall victim to fraud.
- Improve consumer rights, in cases where funds are temporarily blocked, improve transparency on account statements and provide more information on ATM charges.
- Further levelling the playing field between banks and non-banks, in particular by allowing non-bank payment service providers access to all EU payment systems, with appropriate safeguards, and securing those providers’ rights to a bank account.
- Improve the functioning of open banking, by removing remaining obstacles to providing open banking services and improving customers’ control over their payment data, enabling new innovative services to enter the market.
- Improve the availability of cash in shops and via ATMs, by allowing retailers to provide cash services to customers without requiring a purchase and clarifying the rules for independent ATM operators.
- Strengthen harmonisation and enforcement, by enacting most payment rules in a directly applicable regulation and reinforcing provisions on implementation and penalties.
An EC statement read: “The European Commission has today put forward proposals to bring payments and the wider financial sector into the digital age.
“Today’s new rules will further improve consumer protection and competition in electronic payments, and will empower consumers to share their data in a secure way so that they can get a wider range of better and cheaper financial products and services.
“These proposals place consumers’ interests, competition, security and trust at their centre.”
The next step in the PSD3 roadmap will be to analyse how all rules apply to the EU retail payments industry and if they are fit for purpose, taking market developments into account.
