Payments in 2025 #3 – Payment services

More regulatory change is on the horizon for payment services. The detail of key reforms to EU and UK payment services legislation will become clearer in 2025.

Crunch talks on future of EU payments regulation

Later this year legislators will kick off negotiations on changes to EU payment services regulation. These trilogue talks between the European Parliament, Council and Commission are expected to take at least a few months.

The proposals include:

• merging the e-money regime into a revised framework for payment services (PSD3)
• moving conduct rules into a regulation so that they apply consistently across the EU (PSR1)
• extending verification of payee to all credit transfers
• changing strong customer authentication rules

Key points for discussion include determining liability for fraud and technology failures. For example, payment service providers may be liable for fraud caused by employee impersonation scams and technical service providers – who are exempt from PSD2 – may be held responsible if their strong customer authentication services fail.

Improving accessibility to payment services

EU payment service providers should assess the impact of the EU Accessibility Directive on their business. This act aims to make sure that people with disabilities can access products and services in the EU’s single market. It applies common standards to several types of service, including payment services and e-money.

Smarter payments regulation in the UK

The Government has laid out its ambitious for retail payments in the UK. Its National Payments Vision aims to:

• update payments infrastructure
• reduce regulatory overlaps
• unlock Open Banking
• protect against fraud

Actions under the National Payments Vision include the creation of a new Payments Vision Delivery Committee. This Committee will first propose a new governance and funding model for UK retail infrastructure and then sketch out plans for future initiatives.

In line with its plans for a smarter regulatory framework, the Government will also replace the technical standards for strong customer authentication with a more outcomes-based regime.

In the meantime, the FCA continues to intensify its supervision of payments firms. This will include scrutinising firms’ implementation of the Consumer Duty and the actions they take to prevent and handle incidents of fraud.

Date for the diary: 28 June 2025 – the EU Accessibility Act applies

This is the third in a series of five blogposts looking at the outlook for payments regulation in the EU and UK. Read our Payments Outlook 2025 for more.