The European Commission (EC) has outlined its proposals for version three of the Payment Services Directive (PSD3).

Stating that the new proposals place consumers' interests, competition, security and trust at their centre, the EC said the suggested amendments come as a response to recent changes in the payment services market.

PSD2 came into force in 2015, with the EC citing the continued growth of electronic payments in the EU – which reached a valuation of around €240 trillion in 2021 versus around €184 trillion in 2017 – the rise of Open Banking and the emergence of more sophisticated forms of fraud as reasons behind the need for PSD3.

The core of the proposed changes will focus on two sets of measures, the EC said. The first, to revise the payment services directive, would include improving consumer rights, improving the functionality around Open Banking and also introducing a Payment Services Regulation (PSR).

This proposal ensures consumers can continue to safely and securely make electronic payments and transactions in the EU, domestically or cross-border, in euro and non-euro, the EC said, noting that the changes would safeguard the rights of customers and also aim to provide greater choice of payment service providers on the market.

The next set of proposed measures outlines a legislative framework around financial data access.

Including standardisation of customer data and obliging FSIs to make customer data available to other FSIs or FinTechs, the EC said these measures would establish clear rights and obligations to manage customer data sharing in the financial sector.

The EU will also introduce the third iteration of the Basel rules by 2025, although the extent to which individual countries in the bloc, along with the UK, will adopt the measures, remains to be seen.

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