The payments landscape has evolved significantly since the European Commission’s (EC) Revised Payments Services Directive (PSD2) was enforced in 2016. Recognizing the limitations of PSD2 and the shifts in the traditional bank-led industry, the EC proposed amendments to the Payments Services Directive for a second time (PSD3) and introduced a new Payments Services Regulation (PSR) in June 2023.
This PSD3 and PSR package aims to foster a more innovative, competitive, and secure European payment market. PSD3 addresses regulatory aspects and licensing of payments, while PSR focuses on specific use cases and provides comprehensive insights into the responsibilities of various stakeholders involved in the delivery of payment services within Europe.
In 2016, PSD2 paved the way for the emergence of Open Banking . To foster improvements, the EC divided the new regulation into two parts:
PSD3: A directive focusing on licensing and operations of payment service providers, implemented through domestic legislation.
PSR: A regulation covering banks' obligations, which takes effect immediately across all EU Member States.
The PSD3 and PSR proposals are currently under review by the European Parliament and Council. The specific timelines for their enforcement are not yet known, but drawing on the standard legislative procedure, it's likely that the finalized versions may become available by the end of 2024 or in early 2025.
With an expected 18-month transition period, EU Member States should be ready for the implementation of the PSD3 and PSR by around 2026. This timeline showcases a proactive and strategic move toward a technologically advanced financial regulatory environment, and allows Member States to align their systems with the new regulations.
The proposal for PSD3/PSR and the proposal for the Financial Data Access (FIDA) are “different but complementary3” in the sense that they stem from different backgrounds: FIDA is a shift toward the emerging market of Open Finance and is based on financial services that are not covered by PSD3.
There is no definite timeline for PSD3 implementation but finalized versions may become available by late 2024. Member States are granted a two-year period to incorporate the new regulation, leading to the enforcement of PSD3 and PSR by 2026.
Deloitte can assist to ensure regulatory compliance and to leverage on opportunities arising from these upcoming regulations and changes. Our experts teams can provide support on, but are not limited to the following areas:
Contact us for more information on PSD3/PSR implications, support on regulatory compliance and to identify new revenue opportunities.