🎥 Pressed for time? Watch the latest Insight Out episode for a breakdown of open finance,PSD3, and the key shifts shaping open banking in 2025 and beyond.

As Europe prepares for the next big leap in payments regulation, PSD3 is set to reshape how businesses, consumers, and providers operate across the financial ecosystem. To break it down, we sat down with our Go to Market Director, Frankie Elmquist, to talk about what PSD3 is, what’s changing, and why it matters 💡

What is PSD3?

Q: Let’s start with the basics - what is PSD3?

A: PSD3stands for the Payment Services Directive, Version 3. Think of it likethe “PlayStation” of payments regulations - each version brings new featuresand upgrades. The new version is expected in 2026, and there’s a lot to lookforward to in terms of how it will shape open banking and beyond.

What’s Changing?

Q: PSD2 has been in place for a while now. What will PSD3 actually change?

A: The biggest shift is structural. Today, PSD2 exists as a single directive, but PSD3 will split into two parts:

• PSD3: Clarifying licensing and supervision requirements
• PSR (Payment Services Regulation): Converting guidelines into uniform EU/EEA-wide rules on business conduct, rights, and obligations

This matters because directives allow for interpretation at the national level, which has led to fragmentation, making it difficult for services to scale and remain interoperable across markets. With the PSR, many of these directives become hard rules applied consistently across all member states.

In practice, that means:

• Greater clarity around what’s working and what needs tightening
• A more level playing field across providers
• A single market for payments with less friction

That’s why PSD3 isn’t just about compliance - it’s a competitive opportunity!

What else is new?

Q: Beyond structure, what are some of the notable changes businesses should expect?

A: PSD3/PSR introduces several important updates:

🔐 Stronger customer protection and fraud prevention
📲 Improved access to bank data (open banking enhancements)
🤝 Enhanced role and rights of third-party providers (TPPs) offering AIS & PIS services
💶 Updates on the use of cash in payments
📈 Alignment with open finance (part of the EU’s Digital Finance Strategy)

In particular, PSD3/PSR sets the groundwork for the upcoming Open Finance Framework, aligning closely with FIDA (Financial Data Access Regulation). This alignment means the market is moving toward broader data-sharing, covering not just payments but also areas like insurance and investments.

What’s the timeline?

Q: When should businesses expect these changes to come into effect?

A: The timeline looks like this:

• 2025: Final text and adoption of PSD3/PSR expected
• Late 2025–mid 2026: PSR goes into effect immediately once adopted
• Mid 2026–early 2027: PSD3 comes into force after an 18-month transposition period at the national level

Because the PSR will apply directly on a set date — unlike PSD2, which required lengthy national implementation — businesses need to be prepared earlier.

How should businesses prepare?

Q: What can businesses and PSPs do now to stay ahead?

A: We’re already seeing early implementations, such as:

• The instant payments regulation, which enabled us to provide instant payments through many banks last year
• The rollout of Verification of Payee, matching IBANs with account holder names to reduce fraud in instant payments
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Our top tips for preparation:

1. Keep monitoring the adoption process in the months ahead
2. Get ready for immediate PSR obligations once published
3. Plan for national PSD3 transposition during the 18-month window
4. Update systems and compliance functions well in advance of 2026–2027 deadlines

Final thoughts

PSD3 marks more than just another regulatory update — it represents the maturing of Europe’s payments ecosystem and the foundation for open finance. For businesses, fintechs, and banks, it’s both a compliance challenge and an opportunity to innovate.

Stay tuned for more in our Insight Out series — and follow us on Linkedin to keep up-to-date as PSD3 moves closer to adoption.

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