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EU policymakers have struck a provisional agreement to overhaul the bloc’s payment services rulebook, marking one of the most significant regulatory updates since PSD2 came into force nearly a decade ago.
The deal – reached between the European Council and the European Parliament – promises tougher anti-fraud measures, clearer fee disclosures and improved access to cash, all under a newly created payment services regulation that amends and modernises PSD2.
Clamp Down on Fraud
EU strikes landmark deal to PSD2
At the heart of the reform is a concerted push to clamp down on sophisticated digital fraud schemes that have proliferated across Europe.
Regulators are particularly concerned about “spoofing fraud”, in which criminals impersonate banks or payment providers to dupe customers into making fraudulent transfers.
Under the agreement, payment service providers (PSPs) will be required to share fraud-related intelligence, as well as verify whether an IBAN number matches the intended account holder before releasing funds. This name-checking measure mirrors the approach already used for instant payments in euros.
Crucially, PSPs that fail to implement mandated fraud-prevention tools will face liability for resulting losses, a move intended to raise industry standards and strengthen consumer confidence.
However, the proposal has drawn criticism from industry groups.
The Computer & Communications Industry Association warned that the liability framework risks clashing with the Digital Services Act, arguing that it could create impractical monitoring expectations and inadvertently weaken consumer protection rather than enhance it.
Rules on the Advertising of Financial Services
The agreement also tightens rules on the advertising of financial services.
Major online platforms and search engines will only be permitted to promote financial products to consumers in a given member state if the underlying provider is properly regulated there – a measure designed to curb the spread of misleading or unauthorised offerings.
Cash Protection
Alongside fraud prevention, lawmakers have turned their attention to transparency.
ATM providers will have to display all charges and exchange rates before a withdrawal is completed, while acquirers and card service providers must give merchants a clear breakdown of the fees they impose.
This, EU officials argue, will allow both consumers and businesses to make better-informed decisions and strengthen competition among providers.
Despite Europe’s accelerating shift towards digital payments, the agreement also seeks to shore up access to cash, particularly in rural areas where ATM networks have thinned out.
Retailers will be permitted to offer cash withdrawals without requiring a purchase, subject to chip-and-PIN authentication and a €150 limit, reinforcing cash’s role as a universal means of payment.
The legislative push comes as Europe weighs the future of digital money more broadly.
The European Central Bank is preparing for a potential launch of a digital euro in 2029, contingent on lawmakers approving the necessary regulation in 2026.
Proponents argue that a digital euro could reduce Europe’s reliance on foreign payment schemes, deepen cross-border integration and modernise central bank money for an increasingly digitised economy.
With the new framework, EU institutions are signalling a bid not only to secure payments but to future-proof the continent’s financial infrastructure – balancing innovation with consumer protection at a moment of rapid technological change.
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