The Payment Services Directive has not just changed the European landscape, but the global one as well, directly or indirectly. For example without the PSD and SEPA, we wouldn’t have seen ISO 20022 become the dominant payment standard globally (and in turn the move from MT to MX), or open banking. Implementing it wasn’t easy – and nor should it have been, given the scale of the ambition and resulting actions.

PSD2 was perhaps not as dramatic, but still far reaching. It’s no surprise then that all eyes are on the PSD3, and we wrote about the first draft here. Indeed, recent Celent research shows that 2/3rds of banks rank PSD3 as having the largest likely impact on European payments over the next 5 years. This is surprising – surprising in that it isn’t higher! Some anecdotal bank conversations have suggested that the budget impact of PSD3 compared to PSD2 could easily be several magnitudes larger.

June 13th 2025 saw an important step in European payments as the European Council finally approved it’s negotiating mandate. Effectively, all three parties involved have now finalised their stance on what the PSD3 and PSR1 should cover, allowing the 3 bodies to then negotiate with each other to create teh final version. The Danish Presidency committed to finalising the trilogues during their term in office which started in July and finishes in December 2025.

Given that the levels of change seen as a result of previous trilogues, this feels ambitious.

There are a number of changes that Council has proposed.

• Some are the result of the recent Market in Crypto-Assets Regulation (MiCAR) which came into force in December 2024, and has highlighted some issues around what qualifies as funds and therefore under the jurisdiction of PSR1 & PSD3.

• There are some tweaks in the open banking parts, notably the requirement that limits planned unavailability to the hours between midnight and 6am.

• One notable area is the extension on transparency of fees. The Parliament proposed to extend the banning of surcharging on all payment instruments, regardless of currency. The Council takes a slightly different tact, focussing on cards. Here they are advocating on greater consistency and transparency of fees. While the Interchange Fee Regulation already required they information, this proposal would complement it by creating a common format and structure for those fees.

• Finally, and perhaps not unrelated to the last point, the Council proposes greater powers for the competent authorities, including powers to enforce changes in strategy, request divestments, limit business operations and more. These are coupled with even greater powers to fine for non-compliance.

It’s worth restating that these are proposals, not defined changes, but they do provide a strong indication of what the Council is thinking.

Assuming the text is finalised this year, then they will start to come into force in 2026, with deadlines in 2027.