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EU payment services legislation revised and expanded

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On 28 June, the European Commission proposed a package of new payment services legislation following an extensive review of the current Payment Services Directive (PSD2). The Commission describes the package as “an evolution rather than a revolution”. Compared with PSD2, the main changes concern consumer protection and Open Banking.

Waving flag of the European Union with yellow stars on a blue background, symbolizing European cooperation and regulation.

The Commission’s new proposal consists of two parts: a revised Payment Services Directive (PSD3) and an entirely new Payment Services Regulation (PSR).

PSD2 has led to undesirable differences between EU Member States because directives have to be transposed into national law. The European Commission has therefore chosen to put part of the new rules in a directly applicable PSR. This will promote further harmonisation of payments within the EU.

The PSD3 directive will still have to be transposed into national law by each Member State. However, it is primarily limited to requirements concerning licences, exemptions and the supervision of payment service providers.

Before the new proposals were published, the Dutch Payments Association and its members responded to a European Commission consultation. In September 2023, the Dutch Payments Association and its members will respond to the current Commission proposals through the Payment Services Regulation Taskforce.

The proposals must first be approved by the European Parliament and the Council of the European Union. This process may take several years. Payment service providers will then have 18 months to comply with the new legislation and regulations.

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