EU lawmakers have reached a landmark agreement to overhaul the bloc’s payment services framework, paving the way for tighter fraud protections, greater transparency on fees, and improved access to cash across member states.
Parliament and Council negotiators confirmed the deal on the new Payment Services Regulation (PSR) and the Third Payment Services Directive (PSD3) on Thursday morning, marking a significant update to the EU’s financial rules.
The legislative package aims to build a more open, competitive and secure payment ecosystem. The PSR focuses on harmonising operational standards and tightening fraud prevention across providers including banks, post-office giro services, payment institutions, technical service providers, and in some cases electronic communications operators and online platforms. Meanwhile, PSD3 is designed to ensure fair competition among payment service providers (PSPs), strengthen supervisory powers, and safeguard access to cash—particularly in remote or underserved areas.
A central component of the new framework is enhanced protection for consumers. Under the agreement, PSPs that fail to deploy effective anti-fraud measures will be liable for reimbursing customer losses. All providers will now be required to verify that a payee’s name and unique identifier match before processing a transaction, with any discrepancies leading to a rejected payment order. PSPs must also apply strong customer authentication and conduct risk assessments, while offering spending limits and blocking options to help customers reduce exposure to fraudulent activity.
The rules further clarify responsibility for fraudulent transactions. Any transaction initiated or manipulated by a fraudster will automatically be treated as unauthorised, with the PSP responsible for covering the full loss. Receiving PSPs will also be obliged to freeze suspicious incoming payments. To address rising impersonation scams—where criminals pose as PSP employees to manipulate users—the legislation mandates that providers refund victims in full, provided the customer reports the incident to law enforcement and their PSP.
Online platforms face increased accountability as well. If a platform is notified of fraudulent content and fails to remove it, it will be liable to compensate PSPs that have reimbursed affected customers. This extends existing obligations under the Digital Services Act, adding further friction to reduce the circulation of fraudulent financial content. Advertisers of financial services will also need to demonstrate that they are legally authorised, exempt, or acting on behalf of authorised entities before placing promotions on major online platforms or search engines.
Lawmakers also focused on user experience and financial education. PSPs must ensure customers can access human support—not just automated chatbots—while EU countries are encouraged to invest in public awareness campaigns to help people recognise scams.
Fee transparency was another key element of the deal. Customers must receive clear information about all charges before initiating a payment, ranging from currency conversion costs to fixed ATM withdrawal fees, regardless of the terminal operator.
The agreement also aims to strengthen access to cash across the bloc. Retailers will be permitted to provide withdrawals of between €100 and €150 without requiring a purchase, helping maintain cash availability in rural or underserved areas.
Alongside consumer protections, the package seeks to boost competition by lowering barriers for open banking providers offering account information or payment initiation services. The deal prevents banks and other account-servicing PSPs from placing discriminatory restrictions on authorised open banking firms, ensuring they can access account data on fair terms. Users will also benefit from a dedicated dashboard allowing them to monitor and manage the data permissions they have granted. Additionally, mobile device manufacturers and electronic service providers will have to offer front-end service providers fair and non-discriminatory access to the data needed to process payments.
The agreement reflects the EU’s wider ambition to modernise its payment landscape while balancing innovation, security and consumer rights. Final adoption of the legislation will follow once both institutions formally endorse the negotiated text.
Keep up with all the latest FinTech news here
Copyright © 2025 FinTech Global
