European lawmakers have reached an informal agreement on a revised Payment Services Directive (PSD2) designed to boost competition and innovation while improving consumer protections.
Back in 2013, the European Commission set out proposals for a PSD2 in an effort to improve cross-border payments, tackling what it says is still a fragmented market in areas such as cards, mobile and online.
Following "trilogue" negotiations between the Commission, the European Parliament and the Council of Ministers, an informal deal has now been struck, although a formal agreement has still be set before it is voted on by MEPs and sent to member states for endorsement.
The parliament's economic and monetary affairs committee says that the deal would widen consumer choice by ensuring that a payer using an online account would have the right to use payment software or devices provided by an authorised third party and to have transactions executed on their behalf by this provider.
To stop banks from blocking new entrants, they would only deny third parties access to a payer's payment account for "objectively justified and evidenced security reasons which have been reported to the supervisory authorities".
Meanwhile, the rules aim to improve consumer protection against fraud and payment incidents by making payment service suppliers adopt authentication technologies, ensure personal data is only transmitted through safe channels, and share information only with consent.
MEP Antonio Tajani says: "The new regulatory framework will reduce costs, improve the security of payments and facilitate the emergence of new players and innovative new mobile and internet payment methods."