The New EU Payments Framework: A simplification agenda driven by Level 2 measures

The EU’s new payments framework is edging closer to the finish line, at least at the level of primary legislation (Level 1), with the revised Payment Services Directive (PSD3) and the new Payment Services Regulation (PSR). With the latest confirmation of the compromise texts on both proposals, policymakers are signalling that the long legislative marathon is nearly over, with the expected endorsement by the European Parliament’s ECON committee in early May, and publication in the Official Journal of the EU expected after the summer.

This is the point at which businesses and citizens might expect the “simplification agenda” to start delivering on its promise of clearer rules, fewer overlaps, and a more coherent legal framework.

Some streamlining has indeed been achieved during legislative negotiations, particularly in aligning definitions, reducing fragmentation between national legal frameworks, and clarifying supervisory expectations. But if PSD3/PSR was intended to mark a clean break from the complexity of PSD2, the reality seems more nuanced. The ambition to simplify at Level 1 is quickly counterbalanced by the growing and arguably expanding body of technical rules and detailed measures, also known as Level 2, that will need to be developed.

The nature of modern payments, closely connected with digital ecosystems, APIs, platform economies, and emerging technologies, makes it inherently difficult to “simplify” regulation in any meaningful sense. Innovation continues to outpace rulemaking cycles, and concepts such as embedded finance and tokenisation of assets are no longer theoretical but are rapidly becoming part of the market landscape. At the same time, new risks for consumers, together with increasingly sophisticated fraud schemes, require both policymakers and industry to respond in a more granular and targeted way. Against this backdrop, maintaining a framework that is both robust and future-proof, inevitably, not only demands a high degree of technical specification, but also legislative tools that can be adapted more rapidly than the traditional, and often lengthy, co-decision process allows.

The upcoming Directive and Regulation include a substantial mandate to the European Commission and the European Banking Authority (EBA) (see Annex for an overview). Therefore, at a time when simplification is a stated priority, our overview points to around 25 Level 2 measures - over twice the nine required under PSD2 in 2015 - prompting the question of whether this approach is moving in the right direction.  A detailed EBA roadmap[1] is expected, which will guide the development of regulatory technical standards (RTS), implementing technical standards (ITS), and guidelines across a wide range of areas, from refinements to strong customer authentication to fraud reporting and risk management frameworks. Each of these will involve public consultations, impact assessments, and iterative drafting processes.

In other words, while Level 1 may soon be “completed,” the real regulatory build-out is only just beginning.

There is also a clear signal from policymakers that certain areas may require further attention in the near future, and that not all issues are fully addressed within the current framework. The growing role of digital wallets, for instance, has already been flagged for additional consideration, with the European Commission expected to produce a report, around eighteen months after entry into force, to assess whether digital wallets should be brought into scope, given their growing significance in the payments ecosystem. Similarly, as new payment models emerge, such as agentic payments, questions around data access, liability, and consumer protection will inevitably resurface, requiring parts of the framework to be revisited sooner than anticipated.

In other words, simplification has been part of the narrative, but it comes with important caveats. The payments ecosystem is evolving too quickly, and in too many directions, for regulation to remain either static or overly streamlined. The PSD3/PSR package represents a necessary step forward, but not the final destination.

As the legislative process draws to a close and attention shifts to implementation, stakeholders should prepare for an intensive phase of technical rulemaking. Engagement with the EBA’s consultations will be critical, as these measures will ultimately define how the new framework operates in practice.

Please get in touch if you would like to discuss the implications of PSD3 and PSR for your organisation and how to prepare for the implementation phase.

We support clients in navigating regulatory change in payments and translating emerging requirements into operational impact. This blog was written by Tomasz Krawczyk, George Anastopoulos and Margherita Borla Magnetto.

[1] EBA 2026 Work Programme

Annex

The below table is based on the final compromise texts and covers all Level 2 and Level 3 mandates, under the Payment Services Directive 3 (PSD3) and the Payment Services Regulation (PSR), including, Regulatory Technical Standards (RTS), Implementing Technical Standards (ITS) and Delegated acts.

1.Payment Services Directive 3 (PSD 3)

2. Payment Services Regulation (PSR)