On 22 April 2024, the European Parliament issued a press release stating that it had adopted its position at first reading on the draft Directive on payment services and electronic money services in the internal market (PSD3) and the draft Payment Services Regulation (PSR).

The press release provides that MEPs adopted proposals for an open and competitive payment service in the EU, with strong customer protection against fraud and data breaches. The European Parliament proposed changes to the draft PSR, which was adopted with 511 votes to 22 (and 75 abstentions). It also proposed changes to the draft Directive, which was adopted with 484 votes to 8 (and 118 abstentions).

The press release adds that:

  • The new rules mean that, to protect transfers, unique identifiers should be verified free of charge and payment services providers (PSPs) should ensure strong customer authentication. A PSP failing to apply appropriate fraud preventing mechanisms would be responsible for compensating customers’ losses resulting from fraud, according to MEPs. Customers must also give permission for their personal data to be processed and they should be able to opt out from data sharing or withdraw access to their data.
  • The rules also mean that customers should get clear, transparent, and accessible information about all charges prior to a payment transaction, including currency conversions charges or any fixed fees for cash withdrawal.
  • MEPs want to assure better access to cash, especially in remote or rural areas. To achieve this, retail shops providing cash independently from a purchase (up to €100) should be exempt from the rules, while ATMs that enable cash withdrawals but do not service payment accounts, should be subject to lighter standards.
  • Another aim of the new rules is to allow new players to enter the EU payment services sector, in the area of internet payments subject to authorisation, which would allow customers to pay for online shopping without a credit card. Such services are already on offer in some Member States, but until now, the providers were not regulated at the EU level. New rules should address liability, security and data protection concerns. The same conditions would apply across the EU to the activity of providing payment services, including electronic money services and the legislation should remain technology neutral.

Next steps  

The European Parliament has now closed the first reading on these pieces of draft legislation. Work will be followed up by the new European Parliament after the 6 – 9 June European elections. By adopting the law, the European Parliament is responding to the conclusions of the Conference of the Future of Europe, notably proposals 12(2), (4) and 35(7) on interconnection of payment systems and telecommunications and digital innovation.