The draft Payment Services Directive 3 (PSD3) and accompanying Payment Services Regulation (PSR) will replace the current PSD2 regime in the European Union. PSD3 looks to update and bolster the EU's payments environment by responding to new challenges and gaps in fraud prevention, access to data, and open banking.

 

A number of key improvements anticipated under PSD3 are:

• More stringent customer authentication and fraud monitoring obligations.

• Greater data access and open finance functionality outside the PSD2's perimeter.

• Simplified Third Party Provider (TPP) licensing and supervision.

• Increased consumer protection and harmonisation in the EU member states.

In contrast to PSD2, which launched APIs and data-sharing standards but was unevenly implemented, PSD3 prioritizes regulatory alignment, real-time fraud prevention, and enhanced access to financial data. For payment vendors and financial institutions alike, PSD3 is not merely a compliance requirement-it's a strategic initiative to reorient platforms, partnerships, and customer value propositions.

Because, payments industry is on the verge of its next big regulatory change with PSD3, vendors need to move fast to stay in the game. Some are quietly gearing up, others are assessing their strategy, and some are in danger of falling well behind. The question is: Who's ready, who's waiting, and who's being left out?

Vendors Actively Preparing

FIS

FIS is proceeding cautiously with Payment Services Directive 3 (PSD3), ensuring that its strategy is aligned with regulatory requirements. With fraud prevention, embedded compliance, and open banking innovation in focus, it is tackling leading PSD3 priorities. Its steadfast investment in regulatory readiness proves a proactive stance that leaves clients ahead of changing mandates.

HPS

HPS is making its payments infrastructure flexible enough to accommodate PSD3 needs, through investment in API-based architecture and anti-fraud capabilities. While it is not yet playing a leadership role in PSD3 promotion, HPS is well-placed to react when compliance schedules advance.

Finastra

Finastra is actively enhancing its compliance architecture to prepare for PSD3, with specific focus on real-time fraud detection, safe data access, and open finance embedded capabilities. Finastra is positioning its digital banking and payments solutions against regulatory requirements while also assisting its customers with solutions that drive transparency, innovation, and security. Finastra's continuous advances and strategic collaborations indicate a clear demonstrable commitment towards readiness and long-term compliance success.

Vendors Considering Their Strategy

BPC

BPC also acknowledges the significance of PSD3 and is reviewing its strategic plan. Its current infrastructure does have the capacity to support many anticipated requirements, but a more detailed explanation of its compliance and innovation initiatives will be necessary as deadlines loom near.

OpenWay

OpenWay is technology-wise poised to be able to handle PSD3, although its public position on the directive is restrained. The vendor has been shown to be agile in embracing previous regulations. OpenWay’s products and services are largely prepared for PSD3, and it should be able to react well, although a more apparent public PSD3 story would serve clients better. 

Vendors Getting Behind

Global Payments

For all its size, Global Payments has not shown outwardly a PSD3 strategy. Lacking visible momentum as regulatory compliance becomes a competitive imperative, the inability to show outward movement could prove to be a disadvantage. Institutions looking for tomorrow-oriented partners may start to look elsewhere.

Stripe

Stripe has made some limited strides in PSD3 readiness. Its ongoing focus on off-chain transaction models might not satisfy future compliance requirements. Without an integrated and open PSD3 plan, Stripe could be lacking in meeting institutional needs.

Conclusion

As Payment Services Directive 3 (PSD3) redesigns the European payments environment, the gap between forward-thinking, assessment-based, and stagnant vendors is becoming increasingly apparent.

• FIS and HPS and Finastra are gradually getting ready for what's coming.

• BPC, and OpenWay are considering their strategies and now need to prioritize visibility and execution.

• Global Payments and Stripe will be left in the dust with less public buy-in to PSD3.

As deadlines move in, accountability and decision will identify the leaders of the future regulatory age.

Author: Pradnya Gugale, Principal Analyst at QKS Group