PSR & PSD3: EU reaches provisional political agreement

On 27 November 2025, the European Parliament and the Council have reached a provisional political agreement on the long-awaited Payment Services Regulation (PSR) and the Third Payment Services Directive (PSD3), see press release of the European Parliament and the respective press statement of the Council..

According to official representatives, these reforms mark a decisive step toward a safer, more transparent, and more innovative European payments landscape. For example, Morten Bødskov, Denmark’s Minister for Business Industry and Financial Affairs, says that the new framework represents a major advance in the EU’s efforts to protect consumers, strengthen trust, and support modern payment solutions.

The package aims to fight payment fraud, improve fee transparency, strengthen consumer rights, and modernise open banking. Formal adoption will follow, but the direction is clear now.

Here is a brief summary of the most important PSR/PSD3 issues (for all publicly available information about the PSR/PSD3 journey see our ultimate link tool): 

Stronger protections against fraud

The core objective of the new framework is to tackle the rise of payment fraud and strengthen consumer safeguards. In particular, the legislation targets increasingly common scams in which criminals impersonate banks or payment providers (“spoofing”). Key anti-fraud measures include:

• Name verification before transfers – payment service providers (PSPs) must check that the payee’s name matches the account identifier (IBAN) before executing a transfer, extending the practice already in place for instant payments.

• Mandatory fraud information sharing – PSPs will have to exchange fraud-related data to help detect and prevent scams more efficiently.

• Stronger liability rules – providers that fail to implement the required protective measures will be held responsible for resulting losses.

• Regulated advertising – major online platforms and search engines may only promote financial services offered by entities duly authorised in the relevant Member State. Online platforms will also be liable to PSPs who have reimbursed defrauded customers if they are informed of fraudulent content on their platform and fail to remove it. 

These provisions are designed to make fraud prevention a shared responsibility across the payments ecosystem.

Transparency and access to cash

The PSR also introduces clearer rules on pricing and transparency for consumers and merchants:

• ATM and card transaction disclosures – users must be shown all applicable fees and currency conversion rates before completing a transaction.

• Merchant clarity – the name displayed on customers’ account statements must match the merchant’s trading name, reducing confusion and disputes.

• Fee transparency for merchants – acquirers must disclose all charges for card acceptance services in a clear, comparable format.

In addition, the agreement safeguards access to cash, particularly in rural areas. Retailers will be permitted to offer cash withdrawals without requiring a purchase, verified through chip-and-PIN, up to a maximum of EUR 150 per transaction.

Encouraging innovation / Open Banking

Beyond fraud prevention and transparency, the legislative package seeks to foster innovation and competition in the payments sector. By enhancing secure access to account data for regulated third-party providers, the framework intends to facilitate new and improved digital payment services while maintaining high standards of consumer protection.

Key elements now include the obligation to provide dedicated interfaces for Third Party Providers (TPPs) that must match the availability and performance of the bank’s own channels. The PSR also prohibits obstacles to data access, such as more burdensome SCA processes for TPP access compared to the bank’s own customers.

A further central innovation is the new permission dashboard which enables customers to view, manage, and revoke permissions granted to TPPs. 

Next steps & further timeline

Once the Council and the European Parliament have completed their technical work,  final legal texts will be adopted by the European Parliament and the Council, followed by translation work and finally publication in the Official Journal of the EU, which we assume will likely happen in the first half of 2026.

As regards the final political compromise about the implementation period, the Parliament's or Council's press releases remain silent. Originally, an 18-month implementation period was proposed. Later, the Council proposed to extend this to 24 months. Subject to the final texts and publication in the Official Journal, PSD3/PSR is likely to become applicable in the second half of 2027 (at the earliest). It could also be around first half of 2028 if the EU institutions agreed to extend the implementation period, as suggested by the Council.

Our services

Our firm advises payment institutions, fintechs, and banks on EU and national payment services regulation, including licensing, compliance, and strategic implementation of PSR and PSD3 requirements.

We have extensive experience on accompanying regulatory change projects, including the last significant overhaul of the EU payments regulatory landscape under PSD2. If you have any questions on how PSD3/PSR might affect your business, please get in touch with us.