Payments Insights #6 – EU Legislative Drafting Status Of PSD3 And PSR

When the Second Payment Services Directive (‘PSD2’) replaced the First Payment Services Directive, the EU had solidified the regulatory architecture governing payment services across the single market; and this has served the ecosystem well for the past decade. On 18^th May 2026, the Chair of the European Parliament’s Committee on Economic and Monetary Affairs wrote to the EU Council Presidency to confirm that if the EU Council transmits its position on the Third Payment Services Directive (“Proposed PSD3”) and the Payment Services Regulation (“Proposed PSR”) in its current form, the Committee will recommend adoption at second reading without amendment.

The package now nearing approval confirms the split of that legal architecture in two. The Proposed PSD3 continues to govern authorisation, prudential supervision, and the licensing of payment institutions. Meanwhile, the bulk of the conduct of business rules, such as transparency, fraud prevention, strong customer authentication, and