PSD3 and the Payment Services Regulation (PSR) are the EU package proposed in June 2023 to replace PSD2. PSD3 covers licensing and supervision of payment and e-money institutions, while the directly applicable PSR covers conduct, open banking, fraud and liability, including refunds for some impersonation fraud. A provisional agreement was reached in November 2025.
PSD2 (Second Payment Services Directive)The second Payment Services Directive, Directive (EU) 2015/2366 (PSD2), is the EU law on payment services and their providers, applicable since January 2018. It sets authorisation, transparency, execution time and liability rules, created regulated payment initiation and account information services, and required strong customer authentication. PSD3 and the PSR will replace it.
Open bankingOpen banking is the secure sharing of payment account data, and the initiation of payments, by authorised third-party providers with the customer's consent, through bank interfaces that are usually APIs. In the EU it stems from PSD2, and in the UK from a 2017 competition order. Its extension to savings, investments and pensions is called open finance.
Authorised push payment (APP) fraudAuthorised push payment fraud happens when a criminal tricks a person into authorising a credit transfer to an account the criminal controls, for example by posing as a bank employee or a supplier. Since October 2024 UK providers must reimburse most victims, up to 85,000 pounds per claim. The EU PSR adds refunds for some impersonation fraud.
Electronic money (e-money)Electronic money is monetary value stored electronically, issued on receipt of funds for making payments and accepted by others than the issuer, as in prepaid cards and many wallets. E-money institutions are authorised under the Electronic Money Directive (2009/110/EC), need 350,000 euro of initial capital and must redeem e-money at par value on request.
Payment institutionA payment institution is a firm authorised under PSD2 to provide payment services, such as money remittance, acquiring or payment initiation, without being a bank. It cannot take deposits, may grant only short-term credit linked to payments, must safeguard client funds and holds initial capital of 20,000 to 125,000 euro depending on its services.
PSD2 (Second Payment Services Directive)The second Payment Services Directive, Directive (EU) 2015/2366 (PSD2), is the EU law on payment services and their providers, applicable since January 2018. It sets authorisation, transparency, execution time and liability rules, created regulated payment initiation and account information services, and required strong customer authentication. PSD3 and the PSR will replace it.
Open bankingOpen banking is the secure sharing of payment account data, and the initiation of payments, by authorised third-party providers with the customer's consent, through bank interfaces that are usually APIs. In the EU it stems from PSD2, and in the UK from a 2017 competition order. Its extension to savings, investments and pensions is called open finance.