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PSD3 brewing? EU Commission launches consultations revising the Second Payment Services Directive
PSD 2 was adopted in 2015 however most of the rules were transposed in Malta and implemented in 2018. Across the years since the adoption of PSD 2, the payments market has generally witnessed an influx of new market players, such as FinTech and BigTech firms employing a vast array of new payment technologies, including digital or pass-through wallets, mobile payment apps and electronic payment systems such as buy-now-pay-later (BNPL) solutions and venturing into the world of crypto assets – all market developments which are potentially rendering PSD 2 somewhat outdated.
The increase of new technologies and globalisation has also resulted in increased international payments which may require further regulation, in particular due to the amplification of cyber-risks and payment fraud. While strong customer authentication rules remain relevant, it is becoming apparent that in order to combat newer forms of payment fraud and to further secure payment data (especially within the open banking context) regulation needs to be updated and be kept abreast with novel market trends and technologies.
Hence, the European Commission has launched the consultation documents to obtain feedback from stakeholders in the financial services industry in order to determine whether PSD 2 requires amendments to cater for the aforementioned considerations and if so, how such amendments should be made. The consultation is mainly divided into three segments:
Authors: James Debono, Erika Gabarretta June 14, 2022
- a public consultation on the review of the revised payment services directive (PSD2) and on open finance (the ‘‘Public Consultation on PSD2 and Open Finance’’);
- a targeted consultation on the review of the revised PSD 2 (the ‘‘Targeted Consultation on PSD2’’); and
- a targeted consultation on open finance framework and data sharing in the financial sector (the ‘‘Targeted Consultation on Open Finance and Data Sharing’’),
Authors: James Debono, Erika Gabarretta June 14, 2022