EU is updating payment service regulations across the bloc to increase protection from online payment fraud and hidden fees.
The new rules will apply to banks, payment institutions, post-office giro services, and some online platforms and telecommunications providers, the European Parliament said.
The measures are expected to ensure that payment service providers implement stronger fraud prevention systems and take responsibility for customer losses if these systems are found lacking.
Enhanced fraud protections and customer rights
Under the agreement, payment service providers (PSPs) will be required to verify that payment details, such as the recipient’s name and account information, match before processing a transaction.
If discrepancies are found, the payment will be rejected and the payer notified. PSPs must also offer options to set spending limits and enable blocking measures to help protect customers.
Transactions initiated or altered by fraudsters will be classified as unauthorised, with the PSP being liable for the full amount lost, the Parliament said.
If customers fall victim to impersonation scams — where fraudsters pose as PSP employees and trick customers into approving payments — the provider will have to reimburse the full amount, provided the incident is reported to both the police and the PSP.
Online platforms that host fraudulent content and fail to remove it after being notified will pay reimbursement costs to PSPs that have compensated affected customers.
This rule adds to existing protections under the EU’s Digital Services Act, which governs online platform responsibilities.
Customers must be clearly informed about all costs associated with payments before making a transaction, the European Parliament stressed further.
This includes fees for currency conversion and ATM withdrawals, regardless of which provider operates the terminal. The agreement also mandates that customers have access to human customer support in addition to automated systems.
Improved access to cash and open banking
The new regulations intend to safeguard access to cash, particularly in rural and remote areas.
Retail shops across the EU will be permitted to offer cash withdrawals up to €150 (or at least €100) without requiring a purchase.
The rules are also set to promote fair competition among payment service providers, the European Parliament said.
So-called “open banking” services — which let account holders share financial data with authorised third-party firms — will face fewer barriers. Banks must allow open banking providers non-discriminatory access to payment account data, and payment service users will be given tools to monitor and manage data permissions.
Authorisation procedures for payment institutions are to be simplified but still subject to strict financial oversight.
Crypto asset service providers already authorised under the EU’s Markets in Crypto-assets Regulation will have a streamlined approval process specific to their risk profile and services offered.
All payment service providers must take part in alternative dispute resolution if a customer chooses this process to resolve complaints.
The agreement between the EU Parliament and Council negotiators must now be formally approved by both institutions before taking effect.
