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On 30 September, Luxat gathered professionals from banking, payments and technology at Melusina in Luxembourg for Implementing Plan A: PSD3, is your business ready?, an evening on what the next round of European payment rules will change in practice.
The programme opened with a panel moderated by Jim Kent, with Karen O’Sullivan (CSSF), Michael Pechner (eBay Payments), Kudzenai Masiwa (Luxat) and Raoul Mulheims, co-founder and CEO of Finologee. It closed with a keynote by Jonathan Prince, Finologee’s co-founder and CSO, before the discussion carried on over drinks. The question running through both parts was what Europe got for the effort PSD2 required, and whether PSD3 will change the answer.
Assumption based on current status and trilologue negotiations ”Some PSR provisions will become applicable D+24-30 (pending negotiation results)
PSD2 compliance: investments vs returns
Panellists who lived through the PSD2 implementation were candid about the resources invested in the process. Building and running access interfaces and strong customer authentication cost banks a great deal, and the lack of harmonisation and unclear liability between banks, providers and technology firms added to the burden.
Fraud was the clearest return. Strong customer authentication made unauthorised payments harder to carry out, and that protection reached consumers whether or not they had heard of PSD2.
The panel also distinguished between business models. A bank serving mainly corporate or institutional clients carries the same obligations as a retail bank, with far less use made of the interface it had to build. For those banks, the return came mostly as compliance, unless they intentionally chose to make it a strategic development:
“Building it to the letter is the easy part. Having run PSD2 access for around 40 financial institutions since 2019, I believe the banks that will get something back from PSD3 are the ones that treat it as an opportunity to build on. That is what we have been doing for our clients: taking the access required by the rules and making it work for them.”
Raoul Mulheims, CEO and co-founder of Finologee
PSD3 and the PSR: a correction, not a leap
The consensus was measured. PSD2 was the leap, opening payment accounts to licensed third parties. PSD3 and the PSR read more as a correction of what it left unfinished.
Fraud is where panellists expected the clearest progress, through an IBAN and name check on all credit transfers, refunds for bank-impersonation fraud and liability for platforms that leave scam content up once notified.
Beyond that, the change for banks and providers is expected to be more contained than in 2018. A point that came back several times during the evening was that fraud itself has moved on: where PSD2 set out to make systems harder to break into, attackers now go after the user instead, through impersonation and other manipulation tactics.
From Premium SMS to PSD3: twenty years of payment rules in practice
In his keynote, Jonathan Prince traced twenty years of payment rules through the companies he co-founded: Mpulse in 2005, working under telecom rules, Digicash in 2012, made possible by the payment institution licence the first Payment Services Directive created, and Finologee in 2017, which now runs the PSD2 interface for around 40 financial institutions.
The low usage has clear causes: interfaces that each work differently, friction at checkout, no business model for banks and no pull from consumers already happy with cards and wallets. PSD3 and the PSR, expected to apply in 2028, fix much of the plumbing but leave demand to the market. That raises the risk of another compliance exercise, built to the letter and little used. FIDA could change that outcome, but it has stalled in trilogue. The other route is banks moving on their own.
Phone billing took off because it was instant. Digicash took off because it was easier than cash. The usage PSD2 never produced may come the same way, perhaps through an AI assistant acting for the customer rather than a pay-by-bank button.
Finologee runs PSD2 access interfaces for banks and payment institutions and supports their migration to PSD3 and the PSR
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