The European payments landscape has changed considerably since the introduction of PSD2 and Open Banking in 2015. Demand for cashless payments have increased greatly over the past number of years, further accelerated by the Covid 19 pandemic, while the launch of new payments rails such as SEPA Instant Payments in 2017 have shifted the European payments landscape considerably.
To address some of the challenges in the payments market and to keep pace with the requirements of consumers and businesses, a new legislative framework has been proposed by the European Commission; Payment Services Directive 3 (PSD3) and the new Payment Services Regulation (PSR).
In addition to PSD3 / PSR, new SEPA Instant Payments legislation is expected before the end of this year, which will most notably make participation in the Instant scheme mandatory for all PSPs who currently offer SEPA Credit Transfer to their customers. These legislative changes will fundamentally alter the European Payments landscape for the better, strengthening consumer protection (most notably through enhanced payment fraud and security provisions), enriching open banking, enforcement, and unification.
In this article, our Banking team provides an overview of some of the key regulatory changes including the impacts of PSD3 / PSR such as the increase of open banking competitiveness and the re-authorisation process for existing Payment and E-Money firms, as well as the evolution of instant payments. These are areas which Fintechs should not only be aware of but should be preparing for in the short, medium and long term.
How KPMG can help
We support our Payment and Fintech clients in a number of areas including:
- Supporting with preparation of a gap analysis against regulatory requirements;
- Identifying the impacts of regulatory change on business and strategy to determine the necessary changes in process, capability, technology etc.;
- Supporting with the implementation of changes to ensure timely compliance with regulatory change;
- Supporting with communications with the Regulator; and,
- Using our proven instant payments framework, to help deliver successful instant payments onboarding projects for our customers.
If you have any queries related to the any aspects of PSD3 / PSR or SEPA Instant Payments, please don't hesitate to contact our team below. We'd be delighted to hear from you.
