European Commission Consults on Revised EU Payment Services Directive and Open Finance

The European Commission has published three consultations on the revised EU Payment Services Directive and on open finance. The results of the consultations will help inform the Commission's review of PSD2 and proposed legislation on a broader open finance framework, as part of plans developed under the 2020 EU Digital Finance Strategy and EU Retail Payments Strategy. The review of PSD2 will take stock of the impact that the Directive has had on the EU payments market and whether its objectives have been achieved. The open finance review will gather evidence on the current state of open finance, its further development and effective consumer protection. The EU is proposing to develop an open finance framework, as outlined under the EU's 2021 communication on the Capital Markets Union.

The first consultation is on the Open finance framework and review of PSD2. It is addressed to the general public and is a non-technical consultation. It poses questions about respondents' payment methods, opinion of the current payments market and of digital payments, experience of payment fraud and payment security, as well as their view of open finance and the way that their financial data is managed. Responses to this consultation should be submitted by August 2, 2022.

The second consultation is a targeted consultation on the review of PSD2, aimed at those with technical knowledge about the payment industry. The first part of the consultation seeks feedback on PSD2's objectives, including how successful PSD2 has been in reaching its objectives, as well as views on the enforcement of PSD2 by national regulators and any proposed revisions that respondents feel should be made to the Directive. The second part of the consultation asks whether PSD2's scope, measures and procedures are adequate, taking a forward-looking approach. Responses to this consultation should be submitted by July 5, 2022.

The third consultation is a targeted consultation on the open finance framework and data sharing in the financial sector and is aimed at professional stakeholders with more in-depth knowledge of the payments sector. The first part of the consultation focuses on the relevance and main principles of data sharing in the financial sector, as well as posing questions for firms who hold and use customer financial data. It also seeks input on customer protection tools and key risks to customers related to customer data sharing. The second part of the consultation seeks input on access to customer-profile data and customers' current investments (and, in the case of the former, the re-use of that data). Responses to this consultation should be submitted by July 5, 2022.

The European Commission plans to report on the application and impact of PSD 2 later in 2022. It has also announced its intention to adopt a legislative proposal for the open finance framework by mid-2022.

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