The European Digital Finance Association (EDFA) has released its position paper on the European Commission’s proposals for PSD3 and PSR1, offering recommendations to ensure a fairer, more innovative, and secure payments ecosystem in the EU.
While PSD2 aimed to enhance competition and drive innovation, market realities have fallen short. Dominant banks and card schemes have strengthened their positions, while technical and regulatory barriers continue to hinder non-bank providers. PSD3 and PSR1 now present a crucial opportunity to reset the landscape.
The European Commission’s proposals for a revised Payment Services Directive (PSD3) and a new Payment Services Regulation (PSR1) represent a significant step towards modernising the EU’s payments and account information landscape.
While the ambition is commendable, the European Digital Finance Association (EDFA) believes that, to have a lasting impact, the package must resolve persistent market imbalances and implementation shortcomings observed under PSD2.
In their latest Position Paper, EDFA presents recommendations aimed at ensuring PSD3 and PSR1 deliver on their potential to drive innovation, enhance competition, and strengthen consumer trust.
EDFA’s key recommendations include:
Data Standardisation & Quality: Mandate core data fields and consistent structures across channels to enable accurate, automated financial services and support financial inclusion.
User Experience & App Navigation: Require seamless mobile app-to-app redirection and harmonised SCA processes to reduce friction and abandonment.
Fraud Liability: Clarify responsibilities between PSPs and banks, particularly in relation to IBAN mismatches and instant payment constraints.
API Access & Support: Enforce reliable service level standards, real-world testing environments, and clear rules for premium services such as variable recurring payments (VRPs).
Non-Discrimination of Payment Methods: Ensure A2A payments are treated equally to card payments in functionality, exemptions, and confirmation processes.
Licensing & Safeguarding: Harmonise licensing standards across Member States and address circular safeguarding requirements that delay market entry.
EDFA supports the Commission’s efforts and urges policymakers to take bold steps to foster real competition, protect consumers, and ensure the resilience and accessibility of Europe’s payment infrastructure.
„This legislative review is a pivotal opportunity to future-proof Europe’s payments ecosystem. We call on EU policymakers to ensure the final texts are not only ambitious but also technically robust and practically enforceable—promoting fairness, protecting users, and supporting a thriving digital finance environment.” – the EDFA said.
Read the full position paper
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