PSD3 vs. PSD2 – a challenge or an opportunity?

PSD2 transformed the payments market in Europe, opening the door to fintech innovation, competition, and safer transactions. But over time, it has become clear that this is not enough. New fraudulent schemes, gaps in open banking, and unequal conditions for market participants all called for updated rules.

PSD3 is the European Commission's response to the challenges of the modern financial environment. It includes new security requirements, unified licensing for payment services, and enhanced control over open banking. 

What changes to the rules does PSD3 bring? Who will benefit from these changes and who will have to adapt? And most importantly, how can businesses prepare for the new realities? 

Let us analyze the key points of PSD3. ⬇️

PSD3 is a new EU Payment Services Directive version that will replace PSD2. 

🎯 The main goal is to increase the level of payment security, expand open banking opportunities, and create a fairer competitive environment for banks, fintech companies, and payment services.

This regulation takes into account the shortcomings of PSD2 that have become apparent in recent years. For example, although open banking has given impetus to the development of financial technologies, it is still difficult to implement, and the level of interaction between banks and fintechs is far from ideal. In addition, fraudulent schemes have evolved, and the regulator is seeking to strengthen consumer protection.

PSD3 does not exist in a vacuum – it is also part of the new Financial Information Data Regulation (FIDA), which should make data exchange even more efficient and secure. Together, these initiatives are creating a single digital financial ecosystem where payments will be faster, more transparent, and more secure.

The introduction of PSD3 is a game changer for all financial market participants. The directive does not just clarify existing requirements – it rebuilds the payments ecosystem, enhancing security, expanding open banking opportunities, and creating a level playing field. Let's take a look at how these changes will affect key players.

Banks: new obligations and competition

Improved interaction with the fintech industry 

PSD3 provides for more transparent APIs and standardized open banking rules, which will make banks integrate with fintech companies faster and more efficiently.

Increased customer confidence

Strengthening payment security will help banks reduce fraud risks and improve their reputation.

⚠️ Risk of losing monopoly on financial services. Competition from fintech companies will increase as new players gain more access to bank data.

Payment services (PSP): easier licensing, more opportunities

Unified licensing in the EU

The PSD3 introduces a simplified licensing system that allows PSPs to operate in all EU countries without the need to go through the procedure in each country separately.

New open banking standards

PSPs will have access to improved banking APIs that will make integrations easier.

⚠️ Stricter security requirements. Additional authentication and data protection measures may complicate processes for some players.

Fintech companies: accelerated market growth

Equal access to banking data

PSD3 provides an improved API infrastructure that will allow fintechs to work more easily with banks and offer more convenient services to customers.

Increased user confidence

Clearer regulatory requirements will increase the level of trust in fintech platforms.

⚠️ Higher compliance costs. Fintechs will have to adapt to new security and regulatory standards, which can be a complex process.

PSD3 is more than just an update to the rules. It is a restructuring of the EU's financial ecosystem that will strengthen security, unify open banking, and create a level playing field for all market players. Banks will have to adapt to new API standards and growing competition from fintech companies. PSPs will benefit from simplified licensing and more scalability, while businesses will get safer and more flexible payment solutions.