Industry voices started to debate whether the new EU payment rules will truly foster innovation or favour incumbents over early pioneers.
The European Council and European Parliament have reached a provisional agreement to strengthen EU payment services and tackle fraud.
Announced on 27 November, the deal looks to modernise the EU’s payments framework by updating the Payment Services Directive (PSD2) and introducing a new Payment Services Regulation (PSR).
Danish Minister for Business, Industry and Financial Affairs, Morten Bødskov, described the agreement as “a major step in the fight against payment fraud” across the EU.
“By enhancing consumer protection, improving transparency, and fostering innovation, we are paving the way for a more secure, efficient, and consumer-friendly payment landscape for all Europeans,” he said.
Under the new rules, payment service providers will face stricter requirements to prevent sophisticated fraud, including spoofing where criminals impersonate a customer’s provider to trick them into making fraudulent transactions.
Providers must share fraud-related information and verify that account numbers match recipient names before processing transfers. They will also be held liable for failing to implement these safeguards.
Transparency will also be a key focus, notes Bødskov. ATM and card transactions must display all fees and exchange rates before completion. Merchants offering card payments must clearly disclose their fees, while retailers will be able to offer cash withdrawals without a purchase, capped at €150 and protected by chip-and-PIN.
Additionally, merchants must ensure charges appear on bank statements under their trading name to avoid customer confusion.
The agreement also aims to promote technological innovation. Open banking infrastructure will be expanded to provide unified access to account information, enabling faster, more efficient and more secure payment services.
The Council and Parliament will continue finalising the technical details before formal adoption, with reports suggesting full implementation could take around 21 months.
Reforms fuel discussion on innovation
Reinout Temmerman, Adviser at the National Bank of Belgium, was one of the first to confirm the provisional PSD3/PSR agreement on LinkedIn.
He described the outcome as a “Thanksgiving present from the co-legislators,” mentioning the deal preserves the Council’s stance on authorisation and impersonation fraud while ensuring platforms face secondary liability.
He also highlighted reforms to open banking aimed at “future-proofing” access via API-only connections.
While the deal itself appears straightforward and largely beneficial, discussion quickly emerged in the post’s comments, focusing on how the legislation might influence innovation in the EU payments landscape.
Jack Wilson, VP Policy & Research at TrueLayer, suggests the priority should now be to ensure robust API performance and user experience, a point Temmerman acknowledged.
Some industry voices offered a more critical view, questioning whether the new rules will truly drive innovation.
Arturo Mac Dowell González, Chair at the Asociación Española de Fintech e Insurtech, explained APIs provided for free by incumbent banks may offer little incentive for genuine progress.
He said PSD2 had, in some cases, hindered new entrants rather than supported them and argued that without clear commercial incentives and supervisory backing, legislation alone might not be enough to deliver meaningful change.”
Wilson replied to González, pointing out PSD2 had in fact lowered barriers to entry for third-party providers, enabling more innovation than before.
He said the focus now should shift to API performance and user experience, saying: “Maybe it will happen through commercial models, although that has been a struggle over a number of years now. Hopefully it will also happen because it is enshrined in regulation.”
González pushed back on Wilson’s perspective, arguing early open banking innovation in the EU often came from independent firms rather than incumbents. He stated when Eurobits Technologies introduced open banking in 2003, and when Sofort and Trustly launched payment initiation services, these were world-first innovations which incumbents were reluctant to support.
González suggested relying on legislation and incumbent-led solutions risks sidelining true pioneers, adding that before the RTS entered into force, Eurobits alone was processing more AIS transactions than all UK open banking providers combined.
He pointed out that banks such as BBVA, Santander, Bankia and Swedbank were leveraging these services to serve millions daily, efforts that, in his view, have been overshadowed.
González concluded: “Because the real innovators are the legislators, and that is why all leading tech companies come from Europe…”
