PSD3 and PSR Explained: What Changes for Fintechs and PSPs

The EU's introduction of PSD3 and its accompanying Payment Services Regulation (PSR) marks a significant evolution in the European payments landscape by increasing the accountability of payment service providers (PSPs) for fraud and tightening the rules around Strong Customer Authentication (SCA). These measures include mandatory IBAN-name verification and require PSPs to participate in cross-industry fraud data sharing, shifting fraud liability to include the payee's PSP in Authorized Push Payment (APP) fraud cases. Additionally, PSD3 and the PSR aim to streamline open banking access for third-party providers (TPPs) by enforcing performance standards and eliminating outdated practices like screen-scraping. The regulatory changes present both compliance challenges and competitive advantages for fintechs, neobanks, and PSPs, with operational adjustments needed across onboarding, authentication, payment execution, and continuous monitoring. Didit, a comprehensive identity and fraud infrastructure provider, offers solutions that align with PSD3/PSR requirements, including biometric authentication and transaction monitoring, facilitating compliance for businesses navigating these new regulations.

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