What is the difference between PSD3 and the PSR?

PSD3 is a directive that each member state transposes into national law; it covers authorization and supervision of payment institutions. The PSR is a regulation that applies directly across the EU; it covers conduct rules such as fraud liability, SCA, open banking and transparency.

Why the split

Under PSD2, everything sat in one directive, and each country transposed it slightly differently. That led to uneven application of rules such as strong customer authentication. Moving conduct rules into a regulation means one text, applied the same way everywhere.

What sits where

• PSD3: licensing of payment institutions, now including e-money institutions, capital requirements, safeguarding of funds, supervision and the treatment of existing licenses.
• PSR: rights and obligations between providers and users, fraud prevention and liability, refunds, authentication, open banking access, information on fees and currency conversion.

What it changes in practice

Institutions deal with their national regulator for licensing questions under PSD3, but the rules on how payments are handled will be identical across the EU under the PSR. Fewer national variations should make cross-border operations simpler.

What it means for payment operators

For platforms serving merchants in several EU countries, the PSR means one set of conduct rules to implement. Authentication policies, fraud controls and transparency settings that can be configured once and applied per merchant make that shift easier to absorb.