PSD3: A New Era for EU Payment Services Regulation
On 23 April 2026 the agreed text of the Payment Services Directive 3 (PSD3) and Payment Services Regulation (PSR) was published. Together these replace the current PSD2 framework and repeal the second Electronic Money Directive, consolidating the regulatory regime applicable to payments and electronic money institutions across the European Union. This is the first significant overhaul of payments regulation in the EU since PSD2 and will result in a material shift in obligations for EU-based payment service providers across the areas of fraud, strong customer authentication and open banking, to name just a few of the new requirements addressed through the new regime.
The PSD3 regime should also be of interest to UK payment service providers, both in terms of the opportunity it presents for the UK to consider its approach going forwards under HMT’s programme for Modernising Payment Services Regulation and whether to harmonise with the EU, and also to help understand where alignment with the new regime may be necessary in order to ensure the UK’s continued membership of the SEPA payment schemes.
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