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On 23 April 2026, the Council of the European Union published the final compromise texts for the proposed Third Payments Services Directive (“PSD3”) and the new Payment Services Regulation (“PSR”), bringing long-awaited visibility to the next phase of EU payments regulation.
Political agreement between the Council and the European Parliament had been announced in late 2025, but the agreed legal texts were not publicly available until now. Their publication allows firms to assess the direction of travel in detail and begin more concrete implementation planning.
The reform package represents the most substantial overhaul of the EU payments regime since PSD2. It adopts a dual structure: PSD3 will replace the existing directive framework for areas that still require national implementation (such as authorisation, supervision and certain prudential matters), while the PSR will create a directly applicable single rulebook across Member States for conduct, transparency, open banking, fraud prevention and payment execution rules. This structure is intended to reduce national divergence that emerged under PSD2 while preserving local supervisory architecture where appropriate.
In practice, the package addresses several persistent areas of challenge with PSD2: inconsistent implementation across Member States, uneven open banking performance, the evolving fraud landscape, and uncertainty around the application of strong customer authentication (“SCA”). The final texts contain a number of more detailed and prescriptive measures in these areas, which firms will now need to assess carefully.
The Council has also released an “I” Item Note recommending approval by the Committee of Permanent Representatives (“COREPER”), prior to second-reading agreement with the European Parliament. While formal adoption by the Council and Parliament, signing and publication in the Official Journal are yet to occur, the legislative process is now clearly in its final stages. For in-scope institutions, horizon scanning should now transition into planning and implementation.
The new PSD3 and PSD2 also contain a full suite of Level 2 and Level 3 mandates. We are currently developing a dedicated tracker to help firms monitor the transition to the new regime and keep track of new regulatory and implementing technical standards (“RTS” and “ITS”) and guidelines coming further down the line. This should provide a useful tool as the package moves towards formal adoption.
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