What is PSD3?

Short answer

PSD3 is the EU’s third Payment Services Directive. With the Payment Services Regulation (PSR), it replaces PSD2. PSD3 covers licensing and supervision of payment and e-money institutions, while the PSR sets directly applicable rules on fraud, refunds, strong customer authentication, open banking and fees.

In detail

PSD3 is the EU's third Payment Services Directive. With the Payment Services Regulation (PSR), it replaces PSD2. PSD3 covers licensing and supervision of payment and e-money institutions, while the PSR sets directly applicable rules on fraud, refunds, strong customer authentication, open banking and fees.

Why a new framework

PSD2 brought open banking and strong customer authentication, but its application varied between countries, and new types of fraud grew, such as impersonation scams. The new package aims to harmonize rules, fight fraud and improve open banking.

Main changes

E-money institutions are brought under the same framework as payment institutions.
Payee name checks extend to more transfers to fight misdirected payments.
Refund rights for some victims of impersonation fraud.
Adjustments to strong customer authentication and its exemptions.
Better access for open banking providers, with dashboards for users to manage permissions.
Clearer information on fees and currency conversion.

Timing

The texts are close to adoption, and most rules would apply about 21 months after entry into force.

What it means for payment operators

For platforms serving EU merchants, the PSR will affect authentication rules, fraud handling and transparency. Authentication policies configurable per merchant, and operations and security controls that can be updated as rules change, help you adapt without rebuilding flows.

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