The clock has started on the biggest shake-up of Europe’s payments rulebook since 2015, and firms that wait too long to prepare could find themselves stuck with an obsolete licence.
According to Vixio, the third Payment Services Directive (PSD3) and its companion Payment Services Regulation (PSR) are nearing official publication in the EU, with entry into force expected in Q3 2026.
Vixio recently delved deeper into what firms need to know about PSD3 compliance.
That triggers a 21-month transition period, putting the compliance deadline at around mid-2028. Payment institutions (PIs) and e-money institutions (EMIs) face a substantial workload before then, from interpreting new requirements to demonstrating compliance across their operations.
The framework aims to modernise rules set nearly a decade ago, when card and digital payment use was far lower and non-bank players were only beginning to enter the market. PSD3 and PSR build on PSD2’s opening of the sector to FinTechs and EMIs, seeking to improve the reliability of digital payments and level the playing field between banks and non-bank providers.
Among the key changes: EMIs will become a sub-category of PIs rather than being licensed separately under the second E-Money Directive, which is being repealed. Initial capital requirements shift unevenly, rising for money remittance and general payment services but falling for EMIs, with firms offering multiple services now required to add the minimums together.
Safeguarding rules gain two new options, including deposit at a central bank, while PIs will no longer be allowed to hold all safeguarded funds with a single credit institution.
Fraud liability also flips. Under PSD2, payers bore the cost of authorised push payment fraud if they had approved the transaction. Under PSD3/PSR, that liability shifts to the payment service provider unless it can prove gross negligence or fraudulent intent by the victim. Real-time IBAN and account name verification will become mandatory before transfers execute, and non-bank PSPs will gain direct access to systems like SEPA without needing a sponsor bank.
Because PSD3 is a directive rather than a regulation, each member state must transpose it into national law, meaning timing could vary significantly across the bloc. PSR, by contrast, applies uniformly regardless of national implementation progress.
That mismatch creates risk: firms in states that lag on transposition could be left holding licences under a framework that no longer legally exists once PSD2 is repealed, complicating reauthorisation and cross-border passporting alike.
Read the full Vixio post here.
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