The EU has proposed the creation of a third Payment Service Directive (PSD3) Directive to replace PSD2 and a regulation on payment services in the internal market in an effort to protect consumers involved in digital transactions.
According to the EU, the need to introduce the PSD3 is justified in order to prevent new forms of fraud and to protect consumers resulting from digitalisation and technological developments (e.g. open banking, contactless and QR code payments).
The PSD3 will not replace PSD2 but rather develop it by extending the fraud and abuse prevention obligations of payment service providers so that they will be required to introduce new customer authentication software. This application will alert the consumer before the final recording of an euro money transfer if the payee's name is different from the IBAN number assigned to the name in the centralised EU payment system.
The rights of recourse of consumers will be extended if the software does not identify fraud or if the fraudster poses as a bank employee. Payment service providers will be able to share fraud-related information. Consumers will also receive additional rights and protection, such as having their funds temporarily frozen with more restrictions, more transparent bank statements and the ability to withdraw up to EUR 50 in cash from shops without making a purchase. Further rules will aim to level the playing field between banks and non-banks.
Proposal for a Regulation on a framework for access to financial information
According to this proposed regulation, customers will be able to share their data through automated systems in exchange for better products and services (e.g. online advice, product comparison). This information could be shared between institutions in an interface that the customer can fully control. The proposal provides a framework for these applications and systems, particularly by clarifying responsibilities and developing dispute resolution mechanisms, which are being developed.
Proposal for a Regulation establishing the digital euro
The introduction of the digital euro could facilitate the widespread acceptance and availability of the currency. The digital euro will be issued by the European Central Bank, but will not be a cryptocurrency. Its volume will be regulated and payment service providers will distribute it. Acceptance by merchants (except micro-enterprises) within the EU will be mandatory. It will be possible to trade online and offline. The digital euro will not be linked to a bank account, but will be held by specific offices and post offices, which will also be able to convert this currency into cash.
For more information on these proposed regulations, contact your CMS client partner or these CMS experts.
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