Payment Services: Embracing the Digital Era

The EU Commission has recently released a series of proposals to modernise and digitalise the payments and financial sector. These measures aim to ensure that the EU's financial industry remains adaptable in the face of ongoing digital transformations while prioritising consumer protection. 

The proposal consists of two key components: 

Revision of the Payment Services Directive (PSD): 

• Proposal for a Regulation on payment services in the internal market 

• Annexes to the proposal for a Regulation on payment services in the internal market 

• Proposal for a Directive on payment services and electronic money services in the internal market (PSD3) 

• Annexes to the proposal for a Directive on payment services and electronic money services in the internal market 

The revised Payment Services Directive (PSD3) will modernise the existing PSD2 and establish a Payment Services Regulation (PSR). These updates aim to ensure secure electronic payments and transactions within the EU, both domestically and internationally, while providing consumers with a wider choice of payment service providers. The measures address fraud prevention, enhance consumer rights, level the playing field between banks and non-banks, promote open banking, and strengthen harmonisation and enforcement. 

Legislative Proposal for a Framework for Financial Data Access: 
 

• Proposal for a Regulation on a framework for financial data access 

This proposal focuses on clear rights and obligations for data sharing beyond payment accounts. It allows customers to share their data securely in machine-readable formats, facilitating access to innovative and cost-effective financial products and services. Financial institutions and fintech firms will be required to establish the necessary technical infrastructure for data sharing, with customer consent being a priority. Customers will have full control over data access, supported by dedicated permission dashboards and robust data protection measures in line with the General Data Protection Regulation (GDPR). The proposal also emphasises standardisation, liability regimes, dispute resolution mechanisms, and fair compensation for data sharing. 

Discussions on these proposals will now commence in the European Council and Parliament.