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EC publishes PSD3 proposals

EC publishes PSD3 proposals

The European Commission (EC) has issued its proposals for the reform of the EU’s payments market.

According to the EC, the update to Payment Services Directive 2 (PSD2), is designed to “bring payments and the wider financial sector into the digital age”.

The proposed update, which will become PSD3 once accepted, comes seven years after its predecessor came into force, bringing with it the advent of open banking and rules for electronic payments

In that time, there has been a consistent rise in the use of electronic and digital payments within the EU, a trend accelerated by the Covid-19 pandemic.

The value of electronic payments reached €240 trillion in 2021, compared to €184.2 trillion in 2017.

According to Mairead McGuinness, commissioner for financial services financial stability and capital markets union , PSD3 and an additional Payment Services Regulation, will “improve consumer protection and support competition” by providing a greater choice of payment providers.

A system to check IBANs and a platform to enable payment service providers to share fraud-related information are two proposals around consumer protection while fintechs will be given access to EU payment systems, subject to safeguards.

PSD3 will also bring in common rules on open banking interfaces for data sharing and customer control over their data.

The proposals have been welcomed by industry groups. The chair of the Open Finance Association, Nilixa Devlukia, said: “We are very encouraged to read the Commission’s proposal for PSD3/PSR, which recognises the need to strengthen the free open banking baseline and to allow the industry to collaborate on value-added services which generate a return on investment for all parties.

“This approach, combined with the separate proposal for instant payments, will help enable open banking to grow into a seamless pan-European payment solution,” she added.

Comments: (2)

A Finextra member
A Finextra member 29 June, 2023, 17:221 like 1 like

So fintechs are running out of money and need a rescue. Bad news: without a business model, even this won't work

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 03 July, 2023, 11:08Be the first to give this comment the thumbs up 0 likes

This doesn't really move the needle much in terms of open finance. The issue of common APIs, their cost to create, maintain and for those to integrate with means the scaling costs are not great. I still maintain that we must move away from this approach to APIs and move towards one where the customer is centric. By this I mean the customer has their own data and is the one who controls its sharing, not allows sharing of data held by financial institutions by handing out API tokens...