The world of payments is changing! On June 28, 2023, the European Commission tabled a dozen texts aimed at building a more secure, efficient and innovation-friendly payments landscape.
Open Banking, fraud, instant transfers... there are many issues to be addressed. To help you understand what's at stake, here's a summary of the main texts currently under discussion in the European Parliament.
For a more detailed analysis, you can download our guide on European payment regulations, co-authored with the firm Onepoint.
PSD3: a Directive to confirm the framework for collaboration
PSD3 focuses on PSP approvals. In particular, it merges the status of Electronic Money Institution and Payment Institution in favor of the latter.
PSD3 is a directive: it is not directly applicable in member states. It must be transposed into national law in the 28 countries of the European Union. It is therefore accompanied by a regulation that can be applied unchanged in each member country, to ensure faster, uniform implementation.
PSR: a regulation that defines the operational contours of PSD3
Harmonization of banking APIs
The PSR (Payment Services Regulation) specifies the functionalities that banks’ mandatory APIs must include. These APIs are essential to the proper functioning of Open Banking and its rollout. Currently, each banking institution can select which standard options to apply, creating a certain degree of complexity, with operations that sometimes differ by bank or by country. Although not all complexities have been resolved yet, the PSR is moving toward a more reliable and harmonized system.
Enhanced safety standards
The PSR requires banks and payment institutions to check IBANs at onboarding (to ensure consistency between the name in the KBIS and the name of the holder in the bank). Fintecture already performs these checks before making its services available to merchants.
Sharing information to combat fraud
The various players will be able to exchange information to strengthen the fight against fraud.
Adjustments to strong authentication
The PSR confirms a change to PSD2 dating from the summer of 2023. For account access services (AIS), a single authentication (SCA - Strong Customer Authentication) will be required every 6 months (instead of every 3 previously). For payment initiation services (PIS), authentication will continue to be systematically required every time and for the first euro.
Instant transfer regulations
Following the Council’s approval in late 2023, this regulation was adopted by the European Parliament on February 26, 2024. Its aim is to make instant transfers mandatory throughout the European Union.
A major change is on the horizon: the rates for instant transfers (SCT Inst) cannot be higher than those for standard transfers (SCT SEPA). This rule will apply to both private and corporate customers. In France, for private customers, instant transfers should therefore be free of charge.
The commission's objective is to switch volumes from conventional SCT to SCT INST in order to :
- Enable beneficiaries (merchants, suppliers, employees, etc.) to access funds more quickly
- Use SCT INST for payment clearing (cards, wallet, etc.)
- Promote new alternative payment methods through instant transfers, with competitive rates.
Next steps
The text was published in the Official Journal of the European Union on March 13, 2024. It came into force 20 days later in all EU countries (including France). This is followed by an application period that differs according to the articles of the Regulation:
January 9, 2025
- All banks must be able to receive instant transfers in euros
- The price of an instant transfer (SCT Inst) must not exceed that of an ordinary transfer (SCT). In France 🇫🇷, it will be free of charge for private customers!
October 9, 2025
- All banks to be able to issue instant euro transfers
- Banks and payment institutions such as Fintecture will need to ensure that the IBAN matches the name of the beneficiary of a transfer.
The Open Finance Regulation (IFAD )
This regulation concerns the entire financial sector, not just payment accounts (credit, savings, etc.). It will enable PSPs to access information on savings accounts and all types of credit (consumer, mortgage, leasing, etc.), with the holder's consent, of course. This will enable PSPs to offer new services, such as checking the creditworthiness of a counterparty.
The euro digital regulation
This regulation aims to create a digital euro, a new ECB currency to be distributed by banks. Companies (and even individuals) could hold a digital currency account on the books of the ECB, via a PSP.
A Directive on the purpose of payments
This directive puts an end to the banking monopoly on access to payment infrastructures. PSPs will be able to access infrastructures (STET credit transfer, ABE Clearing) without going through the banks. This new feature will enable payment institutions to process payments themselves or to go through another payment institution.
The opening up of this market should give payment institutions access to more suitable offers, at more competitive rates.
“The number of proposals under discussion at the European level, combined with a very tight schedule for debate and voting—ahead of the European Parliament elections—demonstrates strong political will and an unprecedented consensus. The issue is no longer one of substance, but rather of how we can work together to build a stronger and more independent European payments system, while ensuring that innovations are rapidly adopted on a massive scale.”
Fanny RodriguezGeneral Secretary and Director of Operations, Fintecture
Conclusion
Fintecture welcomes these new European regulations, which support the development of value-added services based on Open Banking. The standardization of APIs and the development of instant transfers are significant steps that will make transfers much more attractive.
With smoother, more secure payments adapted to every type of use, the "new generation" credit transfer will gradually take its place in the payment habits of individuals and businesses.
