European lawmakers have reached a significant agreement aimed at reshaping the continent’s payment services sector, with a focus on strengthening fraud prevention, improving fee transparency and promoting fair competition between providers.
Parliament and Council negotiators confirmed a deal on the Payment Services Regulation (PSR) and the Third Payment Services Directive (PSD3), laying the groundwork for a more secure and competitive framework across the EU.
The agreement sets out to harmonise rules for payment services offered by banks, post-office giro services, payment institutions and technical providers involved in payment processing. It also covers certain electronic communications operators and online platforms. Taken together, the PSR and PSD3 introduce stricter obligations for payment service providers (PSPs) while seeking to ensure that customers have fair access to services, including access to cash in more remote areas.
A central part of the reform is aimed at strengthening customer protection from fraud. Under the new rules, PSPs that fail to use robust fraud-prevention mechanisms will be required to fully cover customer losses. Providers must verify that a payee’s name matches the unique identifier before executing a transaction, declining payments where discrepancies arise. PSPs must also apply strong customer authentication and conduct risk assessments, with spending limits and blocking features mandated to help reduce exposure to fraud.
The regulation makes clear that if a fraudster initiates or alters a transaction, it will be deemed unauthorised and the PSP will be fully liable. Receiving PSPs must also freeze payments flagged as suspicious. Importantly, consumers impacted by impersonation fraud — where scammers pose as bank or PSP staff — must be refunded the full amount as long as the incident is reported to the police and the PSP is informed.
Online platforms will also face stricter liability if they fail to remove fraudulent content after being notified. This adds another layer to the protections already established under the Digital Services Act. The deal includes new obligations for financial services advertisers, who must demonstrate to major online platforms and search engines that they are legally permitted to promote such services in relevant jurisdictions.
MEPs have secured additional guarantees to ensure individuals can access human support rather than relying solely on automated systems. They also called for public initiatives aimed at educating citizens on safe financial behaviours, reflecting the increasing prevalence and sophistication of scams.
Consumers stand to benefit from greater transparency around fees, with PSPs required to clearly provide information on all applicable charges before a payment is initiated. This includes currency conversion fees and fixed costs for ATM withdrawals, regardless of the ATM operator.
To support access to cash, the agreement will allow retailers to provide withdrawals between €100 and €150 even when customers are not making purchases — a measure intended to help residents in rural or remote regions.
Competition in the payments landscape is another priority for lawmakers. The deal will reduce barriers for open banking providers and prevent banks — acting as account-servicing PSPs — from discriminating against them. Authorised open banking firms must be granted access to account data, with the legislation introducing a list of prohibited obstacles. Users will also gain access to a dashboard helping them manage permissions granted to third-party providers.
Additionally, mobile device manufacturers and electronic service providers will have to allow front-end payment applications to store and transfer the data required to complete payments on fair and non-discriminatory terms. These obligations aim to ensure a more level playing field across the ecosystem, enabling customers to choose the services that best fit their needs.
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