On 27 November 2025, the Council of the EU (Council) and the EU Parliament (Parliament) announced that a provisional agreement had been reached on a new Payment Services Regulation (PSR) and a revised Payment Services Directive (PSD3), replacing the existing Payment Services Directive (PSD2) and the Electronic Money Directive (EMD2).
How did we get here?
In June 2023, the European Commission (Commission) unveiled its draft proposals for PSD3 alongside a newly conceived PSR. The legislative package aimed to:
- combat fraudulent payment activities
- strengthen safeguards for customers
- enhance transparency on fees
- improve competition
- promote technological advancement.
The Parliament and Council adopted their negotiating positions on PSD3 and PSR in April 2024 and June 2025 respectively. In advance of inter-institutional negotiations (trilogue), the Council published comparison documents of the negotiation positions of the Commission, Council and Parliament relating to PSD3 and PSR.
Our earlier article explored some of the topics likely to receive considerable attention in the trilogue.
What's been agreed?
Fraud prevention and customer safeguards
Payment service providers (PSPs) will be required to share fraud-related information between themselves and to check that a payee’s name and unique identifier match.
If a PSP does not put in place suitable anti-fraud mechanisms, it will be liable for a customer's losses.
In an attempt to tackle 'spoofing fraud', where a scammer impersonates a PSP employee and deceives the customer into approving a payment, the PSP must refund the amount in full provided the customer reports the fraud to the police and informs their PSP.
However, building on the Digital Services Act, online platforms will be liable to PSPs, which have reimbursed defrauded customers if they have been informed of fraudulent content on their platform and do not remove it. In addition, platforms and search engines will only be permitted to advertise financial services to customers in a given member state if the company providing those services is duly regulated and authorised in that member state.
Fees and transparency
PSPs will be obliged to inform customers about all charges before the initiation of a payment. This includes information about currency conversion charges or any fixed fees for cash withdrawal at ATMs. PSPs will also be required to make clear to merchants the fees they charge for their services. To assist customers in recognising charges on their accounts, merchants will need to ensure that their normal trading name corresponds to the name that appears on the customers' bank statements.
Competition and open banking
Authorised open banking providers must be able to access payment account data. To this end, PSR will include a list of prohibited barriers to data access. Customers will be given a dashboard to monitor and manage the permissions they have given to access their data. Banks will have to provide payment institutions with access to payment accounts on a non-discriminatory basis.
Manufacturers of mobile devices and electronic service providers will have to permit front-end service providers (such as apps or user interfaces) to store and transfer data needed to process payments, on fair, reasonable, and non-discriminatory terms.
Simpler authorisation
The authorisation process for payment institutions will be simplified. Initial capital will be calibrated to the PSP's risk level and the payment services it provides. Crypto-asset service providers authorised under the Regulation on Markets in Crypto-Assets (MiCA), will benefit from a streamlined authorisation process.
What's next
The Council noted in its press release that the co-legislators will continue to work on the technical elements of the legislative package prior to their final adoption by Council and Parliament. While a precise timeline has not been provided, it is likely that agreed texts will now be in place towards the end of Q1 2026 or start of Q2 2026, with the new regime becoming fully operational after a transitional period, currently expected to be 21 months.
Help is at hand
Please let us know if you have any questions on the new EU payments regime and what steps you can take now to be ready for when it starts to apply.
