The Payment Services Directive 3 (PSD3) is set to reshape the European payment landscape in profound ways. For UK merchants operating in the EU, understanding these changes is critical for compliance and competitive advantage.
Key Changes in PSD3
PSD3 introduces enhanced requirements for open banking APIs, strengthening security protocols and expanding the scope of regulated entities. The directive mandates stricter authentication processes for high-value transactions.
UK businesses, despite Brexit, will need to navigate these regulations when processing payments from EU customers. The regulatory alignment between UK and EU frameworks remains largely intact, but specific implementation details differ.
Impact on Payment Service Providers
Major PSPs like Stripe, Adyen, and Checkout.com have already begun adapting their infrastructure. The changes primarily affect:
- Strong Customer Authentication (SCA) implementation
- Open banking API integrations
- Cross-border transaction reporting
- Dispute resolution timelines
Merchants should work closely with their PSP to ensure smooth transition and avoid potential service disruptions.