The European Commission has published the near-final text of the Payment Services Directive 3 and the accompanying Payment Services Regulation, setting the stage for the most significant overhaul of European payments law since PSD2 came into force in 2018. The new framework mandates premium API access for licensed third-party providers, establishes a unified authorisation regime across all 27 member states, and introduces liability rules that shift fraud losses more firmly onto payment service providers.

For the UK, which departed the EU's regulatory orbit following Brexit, the implications are considerable. British Open Banking providers operating in Europe will need to comply with PSD3's enhanced strong customer authentication requirements and new data-sharing protocols, while EU firms accessing UK accounts must continue to meet FCA standards. "We're heading towards regulatory divergence that could fragment the European payments market," warned Ruth Wandhofer, a veteran payments policy adviser. "The UK has a window to align selectively with PSD3 while preserving the flexibility that has made its Open Banking ecosystem the most advanced in the world."

The Treasury has signalled that it will consult on a refreshed UK payments framework in the first half of 2026, with officials privately acknowledging that some degree of alignment with PSD3 is commercially necessary for firms that operate across the Channel. Key areas of potential convergence include IBAN verification for fraud prevention, dashboard consent management for consumers, and harmonised incident reporting standards. The outcome will shape whether London retains its position as Europe's de facto Open Banking capital or cedes ground to Dublin, Amsterdam, and Berlin.