Platform data reveals the important role of PSD3
In a significant move to modernize and streamline the European payments market, the introduction of PSD3 is set to revolutionize the global B2B and consumer money transfers market, particularly within the EU's cross-border payments industry.
PSD3, designed to expand open banking, aims to achieve greater efficiency, enhanced consumer protection, and regulatory modernization. Key anticipated outcomes include improved cross-border payment efficiency, mandated participation in SEPA Instant Credit Transfers (SCT Inst) for 24/7/365 settlement, extended regulation to emerging payment technologies, stricter consumer protection and fraud prevention measures, and the adoption of a harmonized EU-wide legal framework through the Payment Services Regulation (PSR).
One of the most significant benefits of PSD3 is the improvement in cross-border payment efficiency within the EU. Reduced settlement times, lower transaction costs, and enhanced transaction transparency will make international fund transfers faster, cheaper, and more accessible for businesses of all sizes and everyday consumers.
The mandated participation in SCT Inst will substantially boost the speed and reliability of EU cross-border transfers, supporting more seamless transactions and cash flow for merchants and consumers alike. This instant payment infrastructure may potentially reduce reliance on slower payment methods and costly card networks.
PSD3 will extend regulation to emerging payment technologies, including blockchain-based payments, digital wallets, and cryptocurrency-related services. This is expected to foster innovation while mitigating associated risks in cross-border payments.
Stricter consumer protection and fraud prevention measures, including improved dispute resolution, clearer liability frameworks, stronger real-time fraud monitoring, and better data-sharing between institutions, will enhance trust and security for both B2B and consumer cross-border transactions in the EU.
The adoption of the PSR alongside PSD3 aims to replace divergent national rules with a harmonized EU-wide legal framework, simplifying compliance for payment providers and enabling better interoperability in cross-border payments. This will reduce complexity and foster a unified single market approach advantageous for global businesses operating in the EU.
For global firms, especially UK-based or non-euro area providers serving EU customers, PSD3 introduces new supervisory and compliance requirements, particularly regarding Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) obligations. Firms must adapt operationally to meet these evolving regulatory demands or risk operational and reputational consequences.
The benefits of a standardized and harmonious payments system within the EU, as a result of PSD3, support a growing global cross-border payments industry. The total addressable market for B2B cross-border payments is expected to reach $56tn by 2030.
Joe Baker, Senior Copywriter at FXC Intelligence, is the author of the report on PSD3 and its impact on the cross-border payments industry. Our platform published this new report, which concludes that the benefits of building a more harmonious national payment system across the EU will complement the growing global B2B and consumer money transfers market.
Companies operating in the EEA and cross-border space may be required to make changes to their services due to PSD3. Across consumer-to-consumer, consumer-to-business, and business-to-business payments, the total amount sent by the EEA was $4.64tn, excluding payments to other countries within the EEA.
In summary, PSD3 is expected to significantly modernize and harmonize the EU cross-border payment landscape, driving faster, cheaper, and more secure transfers. This benefits both the B2B and consumer segments globally by enhancing market accessibility, fostering innovation in payment technologies, and improving the overall reliability and consumer confidence in international money transfers within the EU.
Market sizing for the global B2B cross-border payments industry is anticipated to reach $56tn by 2030, with PSD3 playing a significant role in modernizing and harmonizing the EU cross-border payment landscape. The PSD3 regulation, designed to expand open banking, goes beyond traditional finance by extending to emerging payment technologies such as blockchain-based payments, digital wallets, and cryptocurrency-related services, thereby fostering innovation within the technology sector.
