Most of you are probably familiar with PSD2 – the Payments Services Directive 2. The European Union has now introduced a new rulebook for payments called the Payment Services Regulation (PSR). It officially came into force in November 2025, and it’s a big deal for banks, fintechs, and anyone who moves money online.
In addition to PSR we are now waiting for the third Payment Services Directive (PSD3) to come into force, supposedly at the beginning of 2026 with national implementation following. PSD3 is the updated EU directive that works hand-in-hand with PSR. While PSR sets the operational rules (and applies directly across all EU countries), PSD3 focuses on licensing, supervision, and governance for payment and e-money institutions (which now will be included in PSD3 instead of its own regulatory framework). An article covering PSD3 will follow.
Together, PSD3 and PSR aim to make payments not only safer and more transparent but also harmonized across Europe - covering fraud prevention, open banking, and stronger oversight.
What’s New in PSR?
• Better Fraud Protection : Ever made a payment to the wrong receiver? Banks and payment providers must now check that the name of the customer matches the IBAN before sending money. No more “wrong account” surprises.
Have you ever been subject to fraud? The payment institutions must share fraud data with each other to stop scams faster.
• Clearer Costs : Hidden fees are a big problem; I assume you have experienced such fees. PSR states all charges must be shown upfront - including currency exchange and ATM fees.
• Open Banking Gets Easier : Third-party apps (like budgeting tools, both independent and offers by banks and payment institutions) get fair access to your bank data – securely and without unnecessary hurdles. This fosters innovation and customer control over its financial situation.
• Access to Cash : Still using cash? Cash accounts for a mere 1% of the GDP in Sweden whereas the average in EU is 12%. Accordingly, cash is still an important facilitator of the European economy. Perhaps you have bought a pack of chewing gum only for the purpose of withdrawing EUR 30 at the counter? Now, to ease access to cash, PSR prescribes that you should be able to withdraw cash (up to €150) without buying anything from the relevant store. Good news for rural areas and people who prefer cash.
• Human Support : This is my personal favorite! I am sure you have been frustrated when you need assistance regarding transfer of money, withdraw cash and checking your accounts with an AISP service only to end up in a “conversation” with a chatbot followed by a conversation in a chat environment with a personal assistant(?) and thereafter, been asked to send an e-mail to customerservice@company.xx (after having created an account) and if the problem still is not resolved, get to speak to customer service by phone. I might be overexaggerating but now, thanks to PSR, there will be no more endless chatbot loops. Providers must offer real human help for payment issues. Surely a cost for the payment services providers but in the end a payment system that will be smoother and more customer friendly.
Why the PSR Matters Beyond Banks
• For businesses: More trust in online payment means happier customers.
• For consumers: Safer transfers, fewer hidden costs, and better control of your money.
• For tech companies: Clear rules for connecting apps and banks.
When Do These Changes Apply?
Most rules kick in by mid-2027, but if you are subject to the PSR and the PSD3 you should start preparing. If you work within the payments industry (including e-money) - or rely on them - now is the time to get ready.
Bottom line
PSR is about making payments simple, secure, and transparent for everyone. Whether you’re a fintech founder, a retailer, or just someone who shops online, these changes will touch your daily life.
