?? Navigating EU Payments Regulations: Insights from 2025 and Beyond

With an eye on the future, the SIBOS report "The Future of Payments 2025 – Digital, Instant, Profitable?", published by Finextra, highlights the transformative impact of upcoming EU payment regulations. As banks and financial institutions face these shifts, here are some of the key takeaways and preparation strategies:

PSD3 & PSR: Building on PSD2, PSD3 and the Payment Services Regulation (PSR) seek to enhance open banking, encourage new entrants, and drive competition. These regulations are designed to:

• Lower compliance barriers for fintech, fostering innovation and collaboration
• Push forward open finance by enabling more data-sharing and expanding service offerings
• Improve transparency, with strict requirements to combat hidden fees, ultimately building greater trust and consumer relationships

Instant Payment Regulation (IPR): IPR mandates that Payment Service Providers (PSPs) offer real-time, euro-denominated transactions 24/7 at no extra cost. Benefits include:

• A consistent standard for instant payments across the EU
• Mandatory fraud prevention measures, including daily sanctions screening and Verification of Payee (VoP) for error/fraud prevention
• Opportunities for banks to differentiate through API-enabled, cloud-based solutions for faster compliance and enhanced services

Fraud Mitigation & Consumer Protection: Both PSD3 and IPR address fraud and security, requiring VoP services, data transparency, and scalable security infrastructure. These measures aim to:

• Reduce fraud risks and elevate customer satisfaction
• Lower banks’ exposure to enforcement actions and dispute resolutions

Framework for Financial Data Access (FIDA): PSD3 will likely lead to broader financial data sharing through FIDA, which could reshape financial advisory services and expand open finance to include insurers and asset managers.

Preparing for Compliance:

• Identify overlapping requirements across regulations to streamline compliance efforts and avoid duplicative work
• Consider API-enabled, cloud-based solutions to integrate instant payments and fraud prevention
• Align timelines and regulatory scope for each regulation, ensuring readiness as new standards emerge

As Daniel Hellmann, Director of Risk Advisory at Deloitte, noted, these regulations collectively aim for a level-playing field, consumer protection, and market integration. Embracing these changes proactively can open new paths for growth, secure customer trust, and improve market positioning.

With the October 2025 timeline set for the Digital Euro, it’s clear that the EU payments landscape is only set to evolve further. Now is the time to prepare and leverage these changes for a more innovative, efficient, and customer-centric approach to payments.

Full report is available: https://www.finextra.com/researcharticle/317/the-future-of-payments-2025--digital-instant-profitable?utm_source=finextra&utm_medium=article&utm_campaign=finextra-paper-17102024

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