Negotiators from the parliament and the council agreed on the Payment Services Regulation (PSR) and the Third Payment Services Directive (PSD3), the Parliament said in a Thursday (Nov. 27) press release.
The deal will now be considered by the parliament and the council, both of which must formally adopt it before it comes into force, according to the release.
If adopted, the deal would require payment service providers (PSPs) to cover customers’ losses if the PSP fails to implement appropriate fraud prevention mechanisms, the release said. It would also require PSPs to check that a payee’s name and unique identifier match; refuse the payment order and inform the payer in cases of discrepancies; ensure strong customer authentication; and offer spending limits and blocking measures.
The deal would also make online platforms liable to PSPs that have reimbursed defrauded customers if the platforms are informed of fraudulent content on their platform and fail to remove it, per the release.
To protect consumers from hidden fees, the deal would require companies to inform their customers about all charges before initiating payments, according to the release. This requirement includes currency conversion charges and fixed fees for cash withdrawal at ATMs.
“The regulation aims to harmonize payment services and strengthen fraud prevention across the [European Union],” the release said.
In its own press release about the deal, the European Council said this provisional political agreement will, among other things, “help tackle increasingly common new forms of payment scams.”
Other provisions of the deal would enable retailers to offer cash withdrawals without a purchase being made; require merchants to ensure that their normal trading name matches the name that appears on customers’ bank statements; and allow more modern payment services to be offered through improved access to bank account information.
PYMNTS reported in January that PSD3 had been two years in the making and would update PSD2, which was introduced in 2016.
The report said the changes would be sweeping in Europe, shifting how the directive impacts banks and PSPs.
