The European Parliament and the Council have reached a provisional agreement on a sweeping reform of EU payment services legislation, aimed at bolstering consumer protection, enhancing competition, and improving access to cash across the Union. The agreement covers both the Payment Services Regulation (PSR) and the Third Payment Services Directive (PSD3), marking a significant step toward a more secure, transparent, and competitive payments landscape.
Stronger Protections Against Fraud
Under the new rules, payment service users will benefit from reinforced safeguards against fraud, particularly online fraud and the misuse of personal data. Payment service providers (PSPs) will be held liable if they fail to implement robust fraud prevention mechanisms. As part of these obligations, PSPs must verify that a payee’s name matches their unique identifier before executing a payment. If discrepancies arise, the payment order must be refused and the payer informed.
The legislation also mandates strong customer authentication and a thorough risk assessment for payment transactions. PSPs must offer customers spending limits and blocking tools to mitigate fraud risks.
Transactions initiated or altered by fraudsters will automatically be treated as unauthorized, with PSPs assuming responsibility for the full fraudulent amount. Receiving PSPs will be required to freeze suspicious transactions immediately.
To counter impersonation scams—where fraudsters pose as legitimate PSP employees—providers will be obliged to reimburse victims in full, provided the fraud is reported both to the PSP and to law enforcement authorities.
Online platforms also face new responsibilities. If they fail to remove fraudulent content after being notified, they will be liable to PSPs that have reimbursed affected customers. This requirement complements the existing obligations under the Digital Services Act.
Furthermore, advertisers of financial services will need to demonstrate to large online platforms and search engines that they are legally authorized to offer such services in the target market or are acting on behalf of an authorized entity.
To ensure better consumer support, PSPs must provide access to human customer service—not just automated chatbots—and public authorities are encouraged to invest in financial education initiatives to help citizens identify and avoid scams.
Improved Transparency on Fees
Consumers will receive clearer information on fees and charges before a payment is initiated. This includes details on currency conversion costs and fixed fees for ATM withdrawals, regardless of which entity operates the machine.
Ensuring Access to Cash
To support cash availability in remote and rural areas, the agreement allows retail stores to offer cash withdrawals of up to €150, with a minimum service threshold of €100, without requiring customers to make a purchase.
Fostering Competition and Innovation
The reform strengthens the competitive position of non-bank PSPs by promoting open banking and reducing obstacles to accessing payment account data. Account-servicing PSPs (typically banks) will be prohibited from discriminating against open banking providers. The legislation also introduces a unified dashboard enabling users to monitor and manage data access permissions.
Manufacturers of mobile devices and electronic service providers will be required to grant front-end service providers—such as apps or user interfaces—non-discriminatory access to the data necessary to process payments.
Simplified Authorisation Framework
The deal simplifies authorisation procedures for payment institutions while maintaining strong prudential standards. Requirements include robust own-fund calculations, reliable budgeting, harmonized timelines, and capital thresholds calibrated to the provider’s risk profile and service offerings.
Crypto-asset service providers already authorized under the EU’s Markets in Crypto-Assets Regulation (MiCA) will benefit from a streamlined authorization framework, provided they maintain appropriate risk controls.
Faster Dispute Resolution
All PSPs will be required to participate in alternative dispute resolution procedures whenever a consumer opts for them, ensuring accessible and timely resolution pathways.
Reactions from Rapporteurs
René Repasi (S&D, Germany), rapporteur for the regulation, praised the agreement, noting that mandatory fraud prevention measures would significantly reduce payment fraud. He emphasized that banks would bear greater responsibility when they fail to prevent fraudulent activity. Repasi also highlighted the inclusion of liability provisions for online platforms where fraud originates, calling it “a win for the Parliament.”
Morten Løkkegaard (Renew, Denmark), rapporteur for the directive, welcomed the deal as a major advancement for the EU’s single market for payments. “By updating outdated rules, we ensure Europe stays competitive in a rapidly evolving financial sector,” he said, stressing that the agreement also guarantees better access to cash by enabling withdrawals in shops without mandatory purchases.
Next Steps
The agreement now awaits formal approval by both the European Parliament and the Council. Once adopted, the new rules will come into force, ushering in a modernized regulatory framework designed to safeguard consumers, promote fair competition, and ensure payment services remain accessible and reliable throughout the European Union.